For foreign individuals and entities that receive income in the U.S., W-8 forms are IRS forms used to verify their country of residence for tax purposes, and to claim exempt status from withholding taxes. There are five types of W-8 forms, each specific to certain income types and filers. Failure to submit the form may result in the full 30% tax being withheld.
What is Form W-8BEN-E?
W-8 forms are issued by the IRS and submitted to payers or withholding agents. They allow foreign individuals and businesses to verify their country of residence for tax purposes and potentially claim a reduced rate of tax withholding. Form W-8BEN is used for nonbusiness income of foreign individuals, while Form W-8BEN-E is used by foreign entities. Form W-8ECI is used by foreign individuals who engage in a trade or business in the U.S. and Form W-8EXP can reduce tax withholding for certain foreign government or tax-exempt entities. Form W-8IMY is used by intermediaries or foreign flow-through entities who receive payments on behalf of a foreigner. All forms must be signed and valid for three calendar years after the year in which it is filed in order to be valid.
IRS Form W-8BEN-E – Who Needs to Fill It Out?
The W-8 series of forms are used by foreign individuals and businesses to claim exempt status from certain withholdings. There are five W-8 forms: W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, and W-8IMY. Form W-8BEN is used by foreign individuals who receive income in the U.S., whereas W-8BEN-E is used by foreign entities. It is important to use the correct form as failure to submit the form may result in a withholding tax of 30%. The forms must be sent to the payer or withholding agent, not the IRS. These forms collect the filer’s name, country of origin, and type of income received. Depending on the income received, a professional may be sought to assist in completing the forms. The forms are valid for the year in which they are signed and three calendar years afterward.
Step-by-Step: Form W-8BEN-E Instructions For Filling Out the Document
The W-8 series of forms are issued by the IRS and are used by foreign persons or entities that lack U.S. citizenship or residency but have worked in the U.S. or earned income in the U.S. There are five types of forms, each one tailored to different scenarios (such as whether the filer is an individual or entity, the type of income earned, and whether they qualify for special tax treatment). To determine the appropriate form to use, filers must provide basic information, including name, country of origin and taxpayer identification number (TIN), and contacts from which the income is received. All W-8 forms are valid for the year they are signed, plus three calendar years after. They must be submitted to the payer or withholding agent prior to receiving income or credits, or else the full 30% rate may be withheld. It’s important to note that U.S. citizens or resident aliens do not have to file a W-8 form.
Below, we present a table that will help you understand how to fill out Form W-8BEN-E.
| Information Required for W-8 Forms | Details |
|---|---|
| Form Type | Type of W-8 form based on filer’s situation |
| Name | Individual or entity’s full name |
| Country of Origin | Country where the filer is a tax resident |
| Taxpayer Identification Number (TIN) | Unique identification number |
| Contact Information | Details of the contact from which income is received |
| Validity | Valid for the year signed + three calendar years |
| Submission | Must be submitted to payer or withholding agent before receiving income or credits |
| Exemption for U.S. Citizens/Residents | U.S. citizens or resident aliens are exempt from filing a W-8 form |
Do You Need to File Form W-8BEN-E Each Year?
Foreign individuals and businesses must file W-8 forms every year to verify their country of residence for tax purposes. Different forms must be used depending on the taxpayer’s situation; for instance, individuals use Form W-8BEN, while foreign entities use Form W-8BEN-E. Any of the five W-8 forms must be submitted to the payer or withholding agent prior to receiving payments, or else the foreign taxpayer may be subject to the full 30% rate of withholding on income made in the U.S. Furthermore, these forms are valid for the year in which they are signed and three years following.
Download the official IRS Form W-8BEN-E PDF
On the official IRS website, you will find a link to download Form W-8BEN. However, to make it easier for you, we are providing the link in our article, which comes directly from the official irs.gov website! Click to download: Form W-8BEN-E
Sources:
https://www.irs.gov/forms-pubs/about-form-w-8-ben-e
https://www.irs.gov/instructions/iw8bene
