Form W-8BEN

This article will tell you how to use Form W-8BEN to certify your foreign status and claim treaty benefits for reduced U.S. tax withholding. It also includes step-by-step instructions on how to complete the form, covering identification, tax residency, and treaty details.

Form W-8BEN

Form W-8BEN, titled “Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals),” is used by non-U.S. individuals to confirm their foreign status and claim any applicable benefits under a tax treaty. This form helps reduce or eliminate U.S. tax withholding on income such as dividends, interest, or royalties that the individual earns from U.S. sources. Form W-8BEN is typically valid for three years unless there are changes in circumstances that would make the information on the form incorrect. After the three-year period, you must file a new form.

Purpose of Form W-8BEN

  1. Confirm foreign status: The form allows non-U.S. individuals to certify that they are not U.S. citizens or residents.
  2. Claim treaty benefits: It allows foreign individuals to claim reduced withholding tax rates (or exemption) on income paid to them under an applicable tax treaty between their country and the United States.
  3. Prevent unnecessary withholding: By submitting this form, the foreign person can avoid the higher default withholding tax rate of 30%.

Who Should File?

  • Non-U.S. individuals receiving income from U.S. sources.
  • Those seeking to claim treaty benefits to reduce or eliminate tax withholding.

Note: Foreign entities should not use Form W-8BEN but instead use Form W-8BEN-E.

When to File?

You should submit Form W-8BEN before receiving U.S.-sourced income. The form must be provided to the withholding agent (such as a bank or investment firm), not to the IRS.

How to Complete IRS Form W-8BEN

How to Complete IRS Form W-8BEN?

Part I: Identification of Beneficial Owner

  1. Line 1: Name of individual
    • Enter your full legal name as it appears on your official documents (such as a passport).
  2. Line 2: Country of citizenship
    • Enter the name of the country in which you hold citizenship.
  3. Line 3: Permanent residence address
    • Provide your permanent address in the country where you claim residence for tax purposes.
    • Do not use a U.S. address or a P.O. Box.
  4. Line 4: Mailing address (if different from above)
    • If your mailing address is different from your permanent residence address, enter it here.
    • If you have the same address as in Line 3, you may leave this blank.
  5. Line 5: U.S. taxpayer identification number (SSN or ITIN)
    • If you have a U.S. taxpayer identification number (TIN), such as a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), enter it here.
    • If you do not have a TIN, you may leave this blank, but it may affect your eligibility for treaty benefits.
  6. Line 6: Foreign tax identification number (FTIN)
    • Enter your foreign tax identification number issued by your country of residence.
    • This helps confirm your identity for treaty benefits.
  7. Line 7: Reference number(s)
    • This line is optional. You can provide an account or reference number to help the withholding agent identify you.
  8. Line 8: Date of birth
    • Enter your date of birth in the format MM-DD-YYYY. Ensure the date matches your identification documents.

Part II: Claim of Tax Treaty Benefits

  1. Line 9: Country of residence for tax purposes
    • Enter the name of the country where you claim tax residency. This must match the country that has a tax treaty with the U.S.
  2. Line 10: Special rates and conditions (if applicable)
  • If you qualify for a reduced rate of withholding under a tax treaty, fill out this section.
    • a) Article and paragraph: Enter the article and paragraph of the tax treaty that provides the reduced withholding rate.
    • b) Type of income: Specify the type of income (e.g., dividends, interest, royalties) for which you are claiming the reduced withholding rate.
    • c) Rate of withholding: Enter the reduced tax rate under the treaty, if applicable.
    • d) Explanation: Provide a brief explanation of why you qualify for the treaty benefits.

Part III: Certification

  1. Signature
  • Sign the form to certify that the information provided is accurate.
  1. Date
  • Enter the date you signed the form.
  1. Print name of signer
  • Clearly print your name.
  1. Capacity in which acting
  • This line is applicable if someone else is signing on your behalf (e.g., legal representative, trustee). Most individuals can leave this blank.

Submitting the Form

  • Who to submit to: You do not file Form W-8BEN with the IRS. Instead, submit it to the U.S. withholding agent or financial institution paying you the income.
  • When to submit: You should submit the form before receiving the U.S.-sourced income.
  • Expiration: The form is valid for three years or until circumstances change.
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