IRS Form W-8BEN & W-8BEN-E: Tax Forms You Need When Contracting Foreign Persons & Entities

Form W-8 is a form that non-US citizens or businesses use to verify their country of residence for tax purposes. Filling it out can mean avoiding a 30% withholding tax on their US income.

Written by Anja Simic
October 18, 2021

IRS Form W-8BEN & W-8BEN-E: Tax Forms You Need When Contracting Foreign Persons & Entities

Form W-8 is a form that non-US citizens or businesses use to verify their country of residence for tax purposes. Filling it out can mean avoiding a 30% withholding tax on their US income.

Written by Anja Simic
October 18, 2021

IRS Form W-8BEN & W-8BEN-E: Tax Forms You Need When Contracting Foreign Persons & Entities

Form W-8 is a form that non-US citizens or businesses use to verify their country of residence for tax purposes. Filling it out can mean avoiding a 30% withholding tax on their US income.

IRS Form W-8BEN & W-8BEN-E: Tax Forms You Need When Contracting Foreign Persons & Entities

Form W-8 is a form that non-US citizens or businesses use to verify their country of residence for tax purposes. Filling it out can mean avoiding a 30% withholding tax on their US income.

Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting) is a tax form that non-US citizens and business entities use to verify their country of residence for tax purposes. If a foreign individual or business doesn't use Form W-8BEN, they risk a full tax withholding of 30% on their income.

At Deel, we often help US-based businesses who want to hire contractors and employees located all over the world and need this form. We'll guide you through the different W-8BEN versions and how to complete one.

Disclaimer: This article is for informational purposes only and is not intended as tax advice. IRS regulations can be subject to change, so check for updates on www.irs.gov. Consult an accountant or tax advisor for help with tax laws.

What is Form W-8BEN?

Staying compliant and in accordance with labor laws and regulations is crucial for any business, especially the one working with foreign entities.

Foreign individuals who receive income from a US source are subject to a 30% tax withholding rate, depending on the type of income. Payments made as compensation for a provided service are the most common, but interest, dividends, rents, royalties, premiums, and annuities are all subject to tax withholding.

Form W-8BEN is used to certify that a contracted person is a foreign individual is a non-US citizen and performs work outside of the United States.

This form, sometimes referred to as a certificate of foreign status, establishes that the contracted individual is both a foreign person and the beneficial owner of the business in question.

As a foreign contractor or employee, you're expected to report your foreign income from the US on your taxes. Submitting a Form W-8BEN can result in a reduced rate of withholding or even an exemption from the withholding tax if you're a resident of a foreign country with whom the United States has an income tax treaty. The treaty means you won't be double-taxed (once by the US government, and once again by your home government), so it's a form worth completing as soon as possible.

Any business in the United States should collect Form W-8BEN from any non-US persons (foreign individuals) or businesses that are engaged in a contractual agreement. The completed form is collected by the withholding agent or payer, not the IRS.

You can obtain a W-8BEN template from the IRS website.

When not to use Form W-8BEN

  • If you are not an individual, use Form W-8BEN-E instead (see below).
  • If you are a U.S. citizen or other U.S. person, including a resident alien individual, use Form W-9 instead.
  • If you are a beneficial owner claiming that income is effectively connected with the conduct of trade or business within the U.S. (other than personal services), use Form W-8ECI instead.
  • If you are a beneficial owner who is receiving compensation for personal services performed in the United States, use Form 8233 or W-4 instead.
  • If you are a person acting as an intermediate, use Form W-8IMY instead.

Automate your tax document collection

From collecting tax forms to storing them all in one place, we automate everything, so you can stay focused on growing your business.

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What is Form W-8BEN-E?

Form W-8BEN-E is filed and submitted by a foreign entity, not an individual.

Similarly to foreign persons receiving certain types of income, the generated income by foreign entities is typically subject to a tax withholding of 30% by the payer or withholding agent in the United States. However, the form W-8BEN-E allows the foreign business to claim a reduction in US taxes if its foreign government has a tax treaty with the United States.

Non-U.S. businesses must provide the Form W-8BEN-E for the same sources of income as an individual would with a Form W-8BEN. If foreign entities do not provide an accurate Form W-8BEN-E when required, they risk paying the full 30% tax rate.

When should Form W-8BEN or Form W-8BEN-E be issued?

Collect a Form W-8BEN or W-8BEN-E from every foreign person (non-resident alien) that will receive income. Do not provide the W-8 to the IRS.

The W-8BEN is valid for three calendar years, ending on the last day of the third year. For example, if you hire someone in September 2021, the W-8BEN form will be valid until December 31, 2024. If a US taxpayer identification number (TIN) is provided, the form is valid indefinitely.

If information on the W-8BEN becomes incorrect (for example, you've changed your name, moved to the US, or to a country that doesn't have a tax treaty), you need to provide a new W-8BEN or other appropriate form within 30 days.

How to fill out the W-8BEN

The W-8BEN is completed by the foreign worker:

Part I: Identification of Beneficial Owner:

Complete Part 1 with your personal information:

  • Name of individual - Enter your legally given name as shown on your income tax return
  • Country of citizenship
  • Permanent residence address: Enter your personal residence address. Do not use a P.O. box or in-care-of address. You should not be using a US address.
  • Your mailing address, if different than your permanent residence address.
  • U.S. taxpayer identification number (SSN or ITIN), if you have one. Generally, when completing this form for your client or employer, you do not need to obtain a US SIN or ITIN; you can just provide the Tax Identifying Number you usually use in your country of residence, like a social security number, on Line 6.
  • Date of birth: use the format mm-dd-yyyy.

Part II: Claim of Tax Treaty Benefits:

If you are resident of a country with a tax treaty with the US, fill this section to claim your exemption from withholding tax.

List of countries with a tax treaty with the United States

Armenia, Australia, Austria, Azerbaijan, Bangladesh, Barbados, Belarus, Belgium, Bulgaria, Canada, China, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Germany, Greece, India, Hungary, Iceland, Indonesia, Ireland, Israel, Italy, Jamaica, Japan, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Korea (South), Luxembourg, Mexico, Malta, Moldova, Morocco, Netherlands, New Zealand, Norway, Pakistan, Philippines, Poland, Portugal, Romania, Russian Federation, Slovakia, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Tajikistan, Thailand, Tunisia, Trinidad and Tobago, Turkey, Turkmenistan, Ukraine, United Kingdom, Uzbekistan, Venezuela.

If your country of residence doesn't have a tax treaty with the US, leave this section empty. The full list of treaty countries can be found on the Internal Revenue Service's website.

Part III Certification

To finalize the form, declare that you have examined the information on this form and to the best of your knowledge and belief it is true, correct, and complete, under penalties of perjury. You will do this by signing the form with your full legal name, and add the date and signature.

How to fill out the Form W-8BEN-E

Part I: Identification of Beneficial Owner

Complete this part with basic entity information, such as:

  • Name of organization that is the beneficial owner - Enter the full legal name of the company used for the business registration
  • Country of incorporation or organization
  • Name of disregarded entity receiving the payment
  • Chapter 3 Status (entity type) - Check one box only. Choose between the following: Foreign Corporation, Foreign Disregarded entity, Foreign Partnership, Foreign Simple trust, Foreign Grantor trust, Complex trust, Estate Government, Central Bank of Issue, Foreign Tax-exempt organization, Private foundation or International organization. If the business status differs in your country, tick the one that is the closest to the local entity type.
  • If you entered disregarded entity, foreign partnership, foreign simple trust, or foreign grantor trust in the question above, you will need to state if the entity is a hybrid making a treaty claim. If you tick "Yes", you will need to complete Part III. If you tick "No", you can skip Part III.
  • Chapter 4 Status (FATCA status)
  • Permanent residence address (street, apt. or suite no., or rural route) - Enter detailed business residence address. Keep in mind that you cannot use a P.O. box or in-care-of address.
  • Business mailing address, if different than the business permanent residence address
  • U.S. taxpayer identification number (TIN), if applicable
  • GIIN and Foreign Tax Identification Number (TIN)

Part II: Disregarded Entity or Branch Receiving Payment

Complete only if a disregarded entity with a GIIN (global intermediary identification number) or a branch of an FFI in a country other than the FFI's country of residence.

  • Chapter 4 Status (FATCA status) of disregarded entity or branch receiving payment
  • Address of disregarded entity or branch (street, apt. or suite no., or rural route). Keep in mind, you cannot use a P.O. box or in-care-of address (other than a registered address)

Part III: Claim of Tax Treaty Benefits (if applicable)

In this section, you should certify all the following if they apply to your business:

  • The beneficial owner's country of residence that has a tax treaty with the US
  • The beneficial owner derives the item (or items) of income for which the treaty benefits are claimed, and, if applicable, meets the requirements of the treaty provision dealing with limitation on benefits.
  • The beneficial owner is claiming treaty benefits for U.S. source dividends received from a foreign corporation or interest from a U.S. trade or business of a foreign corporation and meets qualified resident status.

Add any special rates and conditions, if applicable to your case. If you are claiming the provisions, state the article and paragraph of the treaty identified on the lines above to claim a % rate of withholding and specify the type of income. Explain the additional conditions you meet to be eligible for the rate of withholding.

In Part IV to Part XXIX, state all the applicable elements regarding foreign financial institutions that have a tax treaty with the United States.

To finalize the form, read and make the required declarations and certifications.

Fill in and collect W-8BEN automatically through Deel

Companies using Deel can automatically collect W-8BEN and W-8BEN-E forms from their international contractors and employees. Completed forms are securely stored in your Deel dashboard. Learn more about how it works or book a demo to see Deel's tax compliance in action.

Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting) is a tax form that non-US citizens and business entities use to verify their country of residence for tax purposes. If a foreign individual or business doesn't use Form W-8BEN, they risk a full tax withholding of 30% on their income.

At Deel, we often help US-based businesses who want to hire contractors and employees located all over the world and need this form. We'll guide you through the different W-8BEN versions and how to complete one.

Disclaimer: This article is for informational purposes only and is not intended as tax advice. IRS regulations can be subject to change, so check for updates on www.irs.gov. Consult an accountant or tax advisor for help with tax laws.

What is Form W-8BEN?

Staying compliant and in accordance with labor laws and regulations is crucial for any business, especially the one working with foreign entities.

Foreign individuals who receive income from a US source are subject to a 30% tax withholding rate, depending on the type of income. Payments made as compensation for a provided service are the most common, but interest, dividends, rents, royalties, premiums, and annuities are all subject to tax withholding.

Form W-8BEN is used to certify that a contracted person is a foreign individual is a non-US citizen and performs work outside of the United States.

This form, sometimes referred to as a certificate of foreign status, establishes that the contracted individual is both a foreign person and the beneficial owner of the business in question.

As a foreign contractor or employee, you're expected to report your foreign income from the US on your taxes. Submitting a Form W-8BEN can result in a reduced rate of withholding or even an exemption from the withholding tax if you're a resident of a foreign country with whom the United States has an income tax treaty. The treaty means you won't be double-taxed (once by the US government, and once again by your home government), so it's a form worth completing as soon as possible.

Any business in the United States should collect Form W-8BEN from any non-US persons (foreign individuals) or businesses that are engaged in a contractual agreement. The completed form is collected by the withholding agent or payer, not the IRS.

You can obtain a W-8BEN template from the IRS website.

When not to use Form W-8BEN

  • If you are not an individual, use Form W-8BEN-E instead (see below).
  • If you are a U.S. citizen or other U.S. person, including a resident alien individual, use Form W-9 instead.
  • If you are a beneficial owner claiming that income is effectively connected with the conduct of trade or business within the U.S. (other than personal services), use Form W-8ECI instead.
  • If you are a beneficial owner who is receiving compensation for personal services performed in the United States, use Form 8233 or W-4 instead.
  • If you are a person acting as an intermediate, use Form W-8IMY instead.

What is Form W-8BEN-E?

Form W-8BEN-E is filed and submitted by a foreign entity, not an individual.

Similarly to foreign persons receiving certain types of income, the generated income by foreign entities is typically subject to a tax withholding of 30% by the payer or withholding agent in the United States. However, the form W-8BEN-E allows the foreign business to claim a reduction in US taxes if its foreign government has a tax treaty with the United States.

Non-U.S. businesses must provide the Form W-8BEN-E for the same sources of income as an individual would with a Form W-8BEN. If foreign entities do not provide an accurate Form W-8BEN-E when required, they risk paying the full 30% tax rate.

When should Form W-8BEN or Form W-8BEN-E be issued?

Collect a Form W-8BEN or W-8BEN-E from every foreign person (non-resident alien) that will receive income. Do not provide the W-8 to the IRS.

The W-8BEN is valid for three calendar years, ending on the last day of the third year. For example, if you hire someone in September 2021, the W-8BEN form will be valid until December 31, 2024. If a US taxpayer identification number (TIN) is provided, the form is valid indefinitely.

If information on the W-8BEN becomes incorrect (for example, you've changed your name, moved to the US, or to a country that doesn't have a tax treaty), you need to provide a new W-8BEN or other appropriate form within 30 days.

Automate your tax document collection

From collecting tax forms to storing them all in one place, we automate everything, so you can stay focused on growing your business.

Learn more

How to fill out the W-8BEN

The W-8BEN is completed by the foreign worker:

Part I: Identification of Beneficial Owner:

Complete Part 1 with your personal information:

  • Name of individual - Enter your legally given name as shown on your income tax return
  • Country of citizenship
  • Permanent residence address: Enter your personal residence address. Do not use a P.O. box or in-care-of address. You should not be using a US address.
  • Your mailing address, if different than your permanent residence address.
  • U.S. taxpayer identification number (SSN or ITIN), if you have one. Generally, when completing this form for your client or employer, you do not need to obtain a US SIN or ITIN; you can just provide the Tax Identifying Number you usually use in your country of residence, like a social security number, on Line 6.
  • Date of birth: use the format mm-dd-yyyy.

Part II: Claim of Tax Treaty Benefits:

If you are resident of a country with a tax treaty with the US, fill this section to claim your exemption from withholding tax.

List of countries with a tax treaty with the United States

Armenia, Australia, Austria, Azerbaijan, Bangladesh, Barbados, Belarus, Belgium, Bulgaria, Canada, China, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Germany, Greece, India, Hungary, Iceland, Indonesia, Ireland, Israel, Italy, Jamaica, Japan, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Korea (South), Luxembourg, Mexico, Malta, Moldova, Morocco, Netherlands, New Zealand, Norway, Pakistan, Philippines, Poland, Portugal, Romania, Russian Federation, Slovakia, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Tajikistan, Thailand, Tunisia, Trinidad and Tobago, Turkey, Turkmenistan, Ukraine, United Kingdom, Uzbekistan, Venezuela.

If your country of residence doesn't have a tax treaty with the US, leave this section empty. The full list of treaty countries can be found on the Internal Revenue Service's website.

Part III Certification

To finalize the form, declare that you have examined the information on this form and to the best of your knowledge and belief it is true, correct, and complete, under penalties of perjury. You will do this by signing the form with your full legal name, and add the date and signature.

How to fill out the Form W-8BEN-E

Part I: Identification of Beneficial Owner

Complete this part with basic entity information, such as:

  • Name of organization that is the beneficial owner - Enter the full legal name of the company used for the business registration
  • Country of incorporation or organization
  • Name of disregarded entity receiving the payment
  • Chapter 3 Status (entity type) - Check one box only. Choose between the following: Foreign Corporation, Foreign Disregarded entity, Foreign Partnership, Foreign Simple trust, Foreign Grantor trust, Complex trust, Estate Government, Central Bank of Issue, Foreign Tax-exempt organization, Private foundation or International organization. If the business status differs in your country, tick the one that is the closest to the local entity type.
  • If you entered disregarded entity, foreign partnership, foreign simple trust, or foreign grantor trust in the question above, you will need to state if the entity is a hybrid making a treaty claim. If you tick "Yes", you will need to complete Part III. If you tick "No", you can skip Part III.
  • Chapter 4 Status (FATCA status)
  • Permanent residence address (street, apt. or suite no., or rural route) - Enter detailed business residence address. Keep in mind that you cannot use a P.O. box or in-care-of address.
  • Business mailing address, if different than the business permanent residence address
  • U.S. taxpayer identification number (TIN), if applicable
  • GIIN and Foreign Tax Identification Number (TIN)

Part II: Disregarded Entity or Branch Receiving Payment

Complete only if a disregarded entity with a GIIN (global intermediary identification number) or a branch of an FFI in a country other than the FFI's country of residence.

  • Chapter 4 Status (FATCA status) of disregarded entity or branch receiving payment
  • Address of disregarded entity or branch (street, apt. or suite no., or rural route). Keep in mind, you cannot use a P.O. box or in-care-of address (other than a registered address)

Part III: Claim of Tax Treaty Benefits (if applicable)

In this section, you should certify all the following if they apply to your business:

  • The beneficial owner's country of residence that has a tax treaty with the US
  • The beneficial owner derives the item (or items) of income for which the treaty benefits are claimed, and, if applicable, meets the requirements of the treaty provision dealing with limitation on benefits.
  • The beneficial owner is claiming treaty benefits for U.S. source dividends received from a foreign corporation or interest from a U.S. trade or business of a foreign corporation and meets qualified resident status.

Add any special rates and conditions, if applicable to your case. If you are claiming the provisions, state the article and paragraph of the treaty identified on the lines above to claim a % rate of withholding and specify the type of income. Explain the additional conditions you meet to be eligible for the rate of withholding.

In Part IV to Part XXIX, state all the applicable elements regarding foreign financial institutions that have a tax treaty with the United States.

To finalize the form, read and make the required declarations and certifications.

Fill in and collect W-8BEN automatically through Deel

Companies using Deel can automatically collect W-8BEN and W-8BEN-E forms from their international contractors and employees. Completed forms are securely stored in your Deel dashboard. Learn more about how it works or book a demo to see Deel's tax compliance in action.