What Is the W-8BEN Form?
A W-8BEN form is a tax document provided to individuals by the Internal Revenue Service for them to verify that their nationality and country of residence is not the United States. The form is issued for tax purposes, and it certifies that the individual filing it qualifies for a lower rate of tax withholding or an exemption because they permanently reside in a foreign country that the United States has an income tax agreement with.
Non-citizens of the United States are taxed 30% of some types of payments they receive from US citizens. These payments could be in the form of royalty, interest, salary, rent, premium, dividend, service fee, or an annuity. The filled W-8BEN forms are not submitted directly to the IRS but to withholding agents or payers. If this form is not submitted, one could lose the chance to pay lower taxes; as low as 15% tax on dividends, or even 0% tax on interests.
Instructions for Filling Out a W-8BEN
In most cases, the form is issued by Human Resource executives or personnel that manage the payroll of companies to the foreign employees on their payroll, and should ideally be returned to them before the employees receive their first payment. The W-8BEN form stays valid only three years after it has been signed, and has to be renewed unless 30% withholding tax will apply to all income received from the United States upon expiration.
W-8BEN forms can be downloaded from the website of the United States’ IRS and can be filled following this guide.
Part I – Identification of Beneficial Owner
- Name of Individual who is the beneficial owner
Write your full name here if the form applies to you.
- Country of citizenship
Write the name of the country of which you are a legal citizen. However, if you do not permanently live in the country in which you are legally a citizen, write down your country of permanent residence.
In cases of dual citizenship, fill in the country of which you are both a citizen and resident. Please do not fill the W-8BEN form if you are a citizen of the United States, even if you are a dual citizen.
- Permanent Residence Address
The address to be filled here is where you live permanently. It should be a residential home, not a postal or company address. Fill the city, country and postal code of the residential address in the appropriate spaces.
- Mailing Address
If your mailing address is different from your permanent residential address, write out the address. If not, leave the page blank.
- U.S Taxpayer Identification Number
The number to be written here is either your Individual Taxpayer Identification Number or Social Security Number. If you do not have any of these numbers, leave the line blank and move to the next line.
- a. Foreign Tax Identifying Number
Write out your foreign tax identification number if it is applicable.
b. Check if FTIN not legally required
If according to the W8BEN guide, FTIN is not legally required for you, tick the checkbox.
- Reference Number
Fill in your reference number according to the instructions on the IRS website.
- Date of Birth
Write your date of birth in the MM-DD-YYYY format.
Part II – Claim of Tax Treaty Benefits
- Name of the country whose tax laws you abide by
The country you name has to be one that has a tax treaty with the United States.
- Special Rates and Conditions
Fill in the details that will qualify you for special withholding tax rates. Use the instructions on the IRS website as a guide, to know if you are eligible for this process.
Part III – Certification
This part contains a disclaimer that inputting incorrect, incomplete, or false information on the form and signing it can be punished under the penalty of perjury. It also provides a section for the beneficial owner to sign and to check a box certifying that they qualify to sign the form.
Can I Fill Out a W-8BEN Form Online?
Fortunately, W-8BEN form can be filled online. To fill it, log in to your account, visit the “My Portfolio” menu and click on “Forms and Agreements”. Select “W-8BEN & Tax Residency Self-Certification Substitute form” and fill it according to on-screen instructions provided.
It would be helpful to seek advice from a professional financial advisor before filling the form, either online or offline. If you are an employee, get help from the HR department in your organization because the HR personnel should understand the tax compliance laws that their employees should abide by.
Filling your W-8BEN tax information on the form is easy if you know the right steps. It is important to note that you should not submit your W-8BEN form to the IRS after filling it. Instead, give it to the person that pays you or to a tax withholding agent. Lastly, remember to renew it every three years.