Over the past few months we received many inquiries from clients and parties asked by companies to complete IRS Form W-8.<\/p>\n
Beware Form W-8 is generally filled out by foreign non-US entities or persons (citizens and corporations) in order to claim exempt status from certain tax withholdings. The form is used to declare an entity\u2019s status as non-resident alien or foreign national who works outside of the United States. The benefit is that these individuals receive a certain tax treaty status that affords them certain right, such as lower withholdings from dividends paid by US corporations.<\/p>\n
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There are many different types of W-8 forms.\u00a0 These forms are typically requested by withholding agents, usually firms or brokers and not the IRS.\u00a0 For example, brokers typically request Form W-8BEN, the form used to lower withholdings from dividends, from foreign nationals. Form W-8ECI is used by foreign entities to certify that all income on the form is associated with trade or business within the United States. (This is slightly different from Form W-8BEN, which certifies allocated funds, such as dividends from stocks and mutual funds.) Form W-8EXP is filled out by foreign governments, international organizations, banks of issue, tax-exempt organizations, private foundations, and governments of US possessions.\u00a0 In other words, nothing the typical tax-payer needs be concerned about. Form W-8IMY is filled out by foreign financial intermediaries.<\/p>\n
A withholding agent will typically request a Form W-8BEN of any foreign client.\u00a0 If you are a foreign investor, filling out this form may significantly lower your tax withholdings. A withholding agent must generally withhold 30% of the income distributed to a foreign national, unless the national can be associated with tax treaty status via a Form W-8.<\/p>\n
The form requires some pretty typical information: name, taxpayer identification, country of origin, etc. You will also need to provide a statement describing the national principal contracts to which the income is associated.<\/p>\n
Form W-8ECI is another form that will help you lower your withholding if you a foreign national in a partnership that conducts trade or business within the United States.\u00a0 Like Form W-8BEN, this form will require typical identification information, along with a rather in depth description of nature of the expected income.<\/p>\n
The last W-8 a typical, non-corporate taxpayer might need to know about is Form W-8CE. This form is used to certify that a taxpayer is a \u201ccovered expatriate,\u201d and subject to special tax rules. If you are a recently expatriated citizen waiting on differed compensation\u00a0after\u00a0<\/em>your date of expatriation, you\u2019ll want to fill out Form W-8CE within 30 days after you expatriate. The form must be filed for each tax-deferred account, item of deferred compensation, or interest in a non-grantor trust.<\/p>\n W-8 forms are not the simple tax form the average taxpayer can easily navigate. If you\u2019re one of the few taxpayers required by the IRS to fill out Forms W-8, you would be well-served to consult an experienced US tax professional with international tax experience.<\/p>\n","protected":false},"excerpt":{"rendered":" Over the past few months we received many inquiries from clients and parties asked by companies to complete IRS Form W-8. Beware Form W-8 is generally filled out by foreign non-US entities or persons (citizens and corporations) in order to claim exempt status from certain tax withholdings. The form is used to declare an entity\u2019s […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_daextam_enable_autolinks":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[124,123],"class_list":["post-1618","post","type-post","status-publish","format-standard","hentry","category-planning-for-tax-minimization","tag-form-w-8ben","tag-irs-form-w-8"],"_links":{"self":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/1618","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/comments?post=1618"}],"version-history":[{"count":1,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/1618\/revisions"}],"predecessor-version":[{"id":1619,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/1618\/revisions\/1619"}],"wp:attachment":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/media?parent=1618"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/categories?post=1618"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/tags?post=1618"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}