What is the form W8Ben for?
Thread poster: Valery Kaminski
| US and foreign tax matters || Dec 20, 2006 |
after 40 years in the industry my advice is: Never ask a tax related question - the lunatic asylums throughout this world are full with people who got the right answers and more.
Just enter w8ben on Google (better take an Aspirine before).
In my opinion you don't need an w8ben (primarily for tax reasons) as long as you don't live and work in the US and ...
But filling in this form can't do any harm in Belarus
There are numerous discussion groups on the web.
| So is it actually the agency that needs it? || Dec 20, 2006 |
Sonja, Hans and Cecilia,
Thank you for your input
So is it actually the agency that needs it?
Hans is right, though I am not all that sure aspirin would help.
I must confess I feel natural aversion to filling in documents which seem to need a degree in Law to understand. My strong belief is that they are created by people who must have never tried them on themselves. There must be a law obliging them to do so!
I have this one page form and SIX pages of explanations how to fill it. I guess I have to do it just once and then send the result to whoever else needs it. This idea kind of makes me reconciled to my destiny. Still, I am quite at a loss which lines I have to fill in and which should be left untouched. I will try following the hint about discussion groups, though.
Thanks again and I will sure welcome any other prompts and know-hows in this area.
| W8BEN nuisance strikes again || Feb 6, 2008 |
As I understand it, W8BEN's are only required for non-U.S. citizens if you have equipment or employees in the U.S. Somebody asking you to fill out U.S. tax forms when you have no U.S. Activities is inappropriate. Just more American arrogance in my opinion.
The W8BEN is a one-page form with a 7-page instruction manual. I personally wouldn't sign a thing without understanding what it means first and I'm not about to hire an IRS specialist to tell me. Since I'm not a U.S. citizen and do not work there, live there, have equipment or employees there I consider it totally irrelevant. However, I have also had money stolen from me by a company who refused to pay me when I refused to fill out the form. Such is the nature of ignorance.
Look up the meaning of U.S.-sourced income and see if it applies to you. If it does, you probably have to fill out the form. If it doesn't, at least you're armed with an argument, and that might help. It didn't help me a bit.
| | Blanka Salkova
Local time: 20:59
English to Czech
John Fossey wrote:
A US based buyer has to have a W8BEN form to be allowed to make full payment of your invoice. It is proof to the US Internal Revenue Service that you are not required to pay income tax to the IRS. If the buyer - being a US based company - does not have the W8BEN form on file then they are required to withhold a significant portion of your payment (something like 40%) and remit it to the IRS. You then have to claim reimbursement from the IRS at the end of the year.
Although it appears complicated - because one form covers every possible circumstance - it really isn't. If you are going to have clients in the US you only have to do the W8BEN once and send the same form to any new clients.
Its not a very big deal.
By the way, if they get audited and don't have the W8BEN on file, the IRS won't be contacting your government - they will simply require the company to pay the IRS the amount of withholding that they failed to withhold, plus a penalty.
The unfortunate reality is that if we're going to be doing business across borders then we have to be prepared to comply with cross-border laws. If you don't want your signature on anything issued by the US government it might be advisable not to do business with the US. Otherwise, just do it and get over it.
[Edited at 2010-12-22 03:02 GMT]
John, you put it down nicely. It takes about 5 minutes to fill it out and takes the hassle out of having to claim reimbursement from the IRS, which is far more complicated from my point of view.
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