What is a W-8BEN?
A W-8BEN is a certificate that is held on file by the payor of US income. It is used to prove to the IRS that they checked correctly, whether or not they (as payor) need to withhold US tax on any payment made to you, It also allows you to prove to them, that no tax (or a reduced rate of tax) is due to be withhold as a result of a tax treaty being in place between your home country of residence and the US.
How long is a W-8BEN valid for?
A W-8BEN is valid for 3 years.
I submitted a W-8BEN a few years ago, but now US tax has been withheld on my income. Why?
This happens when an expired W-8BEN is on file. If the payor has not reminded you to fill in another one, they will withhold tax at a flat 30% rate. You can correct this by completing and sending them a new one. However, you may find that they do not refund the tax directly to you. In most cases, this is because it has already been sent to the IRS and you will need to file a 1040NR to reclaim the over payment.
Once I have filled in the W-8BEN, do I need to do anything else?
Not normally. Just sit back and wait for your payment! The payor will at some point (in Feb/Mar of each year) send you a tax document. For non residents this is normally a form 1042-S (Foreign Person’s U.S. Source Income Subject to Withholding). This document will show the gross income paid to you and if applicable any US tax withheld.
Keep this document safe. If claiming overpaid US tax, it will be needed to both prepare the 1040NR tax return as well as be attached to the return as proof of withholding.
The W-8BEN is complicated to complete - can you help me fill it in?
We assist many people in completing this form. Especially in relation making the correct treaty claim to reduce the withholding tax down to a lower or nil figure.
Will I need an ITIN when completing the W-8BEN?
In some cases yes and in some cases no. It all depends on the payor and is also subject to whether a treaty claim reduces the withholding down. All payors of US income have to report payments made to the IRS. So depending on their internal process and depending on the type of income and it's reporting requirement, you may or may not have to apply for an ITIN,
Any more questions?
We are happy to answer any questions you may have. We can also assist with claiming back overpaid US tax as a result of an expired W-8BEN.
Feel free to get in touch today:
Telephone: 0208 1444632