W-8BEN and Tax Withholding For Non-U.S. Persons
What is the W-8BEN Form?
The W-8BEN form is essential for foreign individuals to certify their non-U.S. status and claim any applicable tax treaty benefits. Submitting this form is crucial to avoid higher tax withholding rates on income such as dividends and interest.
Who Needs to File? This form must be filed by non-resident aliens who receive income from U.S. sources, such as dividends, interest, royalties, or other types of income.
Purpose
The W-8BEN form is used to establish your foreign status and to claim a reduced rate of withholding tax under an applicable income tax treaty.
How to File
Complete the form with the required information and submit it to the withholding agent or payer (not the IRS). This could be your broker, financial institution, or other payer.
Validity Period
The W-8BEN form is generally valid for three years. It must be updated and resubmitted sooner if your circumstances, such as your country of residency, change.
Information Required
- Full name
- Country of citizenship
- Permanent residence address (The address in the country of residence)
- Mailing Address (If different from the permanent residence address)
- U.S. taxpayer identification number (TIN), if applicable
- Foreign tax identification number (FTIN)
- Date of Birth: In MM-DD-YYYY format
Step-by-Step Guide to Completing W-8BEN
- To renew your W-8BEN, simply access our mobile app or login to your account online. Once logged in, navigate to Account → Account Profile and select W-8BEN Form.
- Part I - Identification of Beneficial Owner
- Enter your name, country of citizenship, and permanent residence address.
- Part II - Claim of Tax Treaty Benefits
- Provide your country of residence for tax purposes.
- Specify the article number of the tax treaty that applies.
- Indicate the type of income and the reduced rate of withholding.
- Part III - Certification
- Sign and date the form, certifying the accuracy of the information provided.
Tax Withholding Rates and Treaty Benefits
Standard Withholding Rates
Foreign investors are subject to default tax withholding rates on various types of income unless they submit a W-8BEN form to claim a reduction or exemption.
Tax Treaty Benefits
Tax treaties between the U.S. and other countries can reduce or eliminate withholding taxes. By submitting the W-8BEN form, investors can claim these benefits.
Filing Tips
- Keep Accurate records: Ensure all information provided is accurate and complete to avoid delays or rejections.
- Keep your information up to date: Submit a new form if your circumstances change, such as a change in country of residency or citizenship.
- Take note of submission deadlines: Understand when and how often to submit the W-8BEN form to ensure your withholding taxes are correctly managed.
*Please note that W-8 BEN Forms are valid for the year in which they are signed and for the next three calendar years.