Instructions for the Requester of Forms W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, and W-8IMY 06 2022 Internal Revenue Service

what is a w8

If you are filling out a W-8 BEN form and get stuck, the best thing to do is seek counsel from a tax professional with expertise in US tax laws and regulations. Each form requires the filer to provide specific information and serves a distinct purpose in the context of US tax laws and regulations. The IRS website offers more detailed explanations of each form and provides guidance on when to use them. If you are a dual citizen, enter the country where you are both a citizen and a resident at the time you complete this form. If you are not a resident in any country in which you have citizenship, enter the country where you were most recently a resident. Citizen, you should not complete this form even if you hold citizenship in another jurisdiction.

what is a w8

Fixed place of business rules

Information available on the RBC Direct Investing website is intended for access by residents of Canada only, and should not be accessed from any jurisdiction outside Canada. You can update your expiring W-8BEN online by logging in to your account and selecting “Forms and Agreements” from the Person icon. Select the W-8BEN & Tax Residency Self-Certification Substitute form and follow the steps on screen to complete and submit electronically. As a result of agreements between the Canadian and U.S. governments, a W-8BEN is required for holders of all non-registered accounts – even if you don’t hold any U.S. investments. The U.S. Internal Revenue Service (IRS) also requires brokers of U.S. securities to collect a W-8BEN for all holders of Tax-Free Savings Accounts (TFSA), as well as for holders of Registered Education Savings Plans (RESPs) who wish to trade in U.S. securities. If you receive an alternative certification under an applicable IGA described in the preceding paragraphs, you may rely on such certification unless you know or have reason to know the certification is incorrect.

W-9 vs W-8: What’s the Difference Between W9 and W8 Tax ID Forms?

Typically, income for foreign businesses is also withheld at a rate of 30% if no W8-BEN-E is submitted and there are no applicable exemptions or special rates due to relevant tax treaties. If the applicable W8 form is not submitted to the payer or withholding agent beforehand, then you could be required to pay the 30% rate or a backup withholding rate. The W-8 BEN addressed in this article is the specific form for individuals to establish foreign status for the purposes of taxation.

what is a w8

What is a W-9 form used for?

  • Payees that may file this form to apply for exemptions include foreign governments, foundations, and tax-exempt organizations, as well as governments of a US possession or foreign central banks of issue.
  • If you are a resident in a FATCA partner jurisdiction (that is, a Model 1 IGA jurisdiction with reciprocity), certain tax account information may be provided to your jurisdiction of residence.
  • As the name of this one suggests (Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding and Reporting), only foreign governments or other groups use this form to claim a reduction in tax withholding.
  • The withholding agent is required to confirm the number with IRS databases.
  • A transfer is a sale, exchange, or other disposition of a partnership interest, and includes a distribution from a partnership to a partner, as well as a transfer treated as a sale or exchange under section 707(a)(2)(B).
  • A W-8 form is a grouping of tax forms specifically for non-resident aliens and foreign businesses who have either worked in or earned income in the US.

Give Form W-8BEN-E to the person requesting it before the payment is made to you, credited to your account, or allocated. If you do not provide this form, the withholding agent may have to withhold at the 30% rate (as applicable under chapters 3 or 4), backup withholding rate, or the rate applicable under section 1446. If you receive more than one type of income from a single withholding agent for which you claim different benefits, the withholding agent may, at its option, require you to submit a Form W-8BEN-E for each type of income.

Instructions for the Requester of Forms W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, and W-8IMY (06/

If you are an owner-documented FFI that is treated as a nonreporting IGA FFI under an applicable IGA you must check “Owner-documented FFI” and complete Part X. Chapter 4 also requires participating FFIs and certain registered deemed-compliant FFIs to document their entity account holders in order to determine their chapter 4 statuses regardless of whether withholding applies to any payments made to the entities. If you are an entity maintaining an account with an FFI, the FFI may request that you provide this Form W-8BEN-E in order to document your chapter 4 status. This tax is imposed on the gross amount paid and is generally collected by withholding under section 1441 or 1442 on that amount. A payment is considered to have been made whether it is made directly to the beneficial owner or to another person, such as an intermediary, agent, or partnership, for the benefit of the beneficial owner. In order to determine whether to withhold taxes from the payments they issue, the withholding agent must receive a completed Form W-8BEN from the foreign payee (eg. Canadian taxpayer).

What Is a W-2 Form? How to Read It and When to Expect It

US companies should request a W-8 BEN form from all foreign workers who meet the criteria. However, a non-citizen living outside of the US is classified as a Non-Resident Alien (NRA) and is taxed at a different rate. In this article, we’ll break down the basics of the W-8 BEN form, when you need to use one, and why it’s important. Non-citizens living outside the US are taxed differently than US citizens and permanent residents.

  • If you receive a Form W-8BEN-E or Form W-8IMY from a nonreporting IGA FFI that is a trustee-documented trust that indicates its trustee is foreign, you must obtain a GIIN of the trustee on the form.
  • Generally, tax returns and return information are confidential, as required by section 6103.
  • If you do not have an SSN and are not eligible to get one, you can get an individual taxpayer identification number (ITIN).
  • Validating tax identification information is recommended for all new and existing suppliers.
  • Here’s a breakdown of what each section on the W-9 means and how to fill it out.
  • If you have US citizenship or you’re an alien resident, you need to file a W9 with your employer.

Form W-8 series and instructions updated to facilitate compliance with new tax requirements

A resident of another country might have income earned in the United States, but a tax treaty between the U.S. and the nonresident’s country of origin might be in place, stipulating that this income is not subject to withholding. As mentioned, W8 forms are not submitted or requested by the IRS and do not form part of your tax returns. Instead, they are usually requested by payers from which you derive taxable income or credits. If they are not requested, you should take the initiative and submit the application form to any of your beneficiaries where it may be required for tax withholding purposes. W-8 refers to a series of five forms that foreign individuals and businesses use to claim exemptions.

A payment settlement entity is a merchant acquiring entity or third party settlement organization. Under section 6050W, a PSE is generally required to report payments made in settlement of payment card transactions or third party network transactions. However, a PSE is not required to report payments made to a beneficial owner that is documented as foreign with an applicable Form W-8. Generally, for purposes of section 1446(a) or (f), the same beneficial owner rules apply, except that under section 1446(a) or (f) a foreign simple trust is required to provide a Form W-8BEN-E on its own behalf, rather than on behalf of the beneficiary of such trust. Backup withholding requires businesses to put aside advance taxes for people who have had certain tax issues. These problems include not providing an accurate tax ID or failure to report interest or dividend income.

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