What is the form W8Ben for? Thread poster: Valery Kaminski
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Good time of day to everybody!
I got the form W8Ben from two US agencies after passing their qualification tests. They say they need to be able to send me payment.
I live in Belarus and pay my taxes locally. I have never been to the USA. Could anyone advise me on the purpose of this document and what consequences my signing it could lead to?
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Sonja Allen 
United Kingdom
Local time: 15:39
English to German
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| Don't think you need this | Dec 20, 2006 |
I am not quite sure anymore what these were exactly about. We used to receive them at the investment firm where I worked in the UK some time ago and, as far as I remember, we always sent them back with a note saying that we were an UK based company and therefore not liable to US taxes. But I am not an expert in this and you need to ask around further.
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Hans G. Liepert
Switzerland
Local time: 16:39
English to German
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In memoriam | US and foreign tax matters | Dec 20, 2006 |
Dear Valery
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 numero... See more Dear Valery
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.
Good luck ▲ Collapse
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Parrot
Spain
Local time: 16:39
Spanish to English
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It's a form that says you're not subject to US withholding taxes and why (not resident in the US). I've signed a lot of those.
It may seem obvious and inane, but by the time you get to the signature, you get an idea of how the IRS classifies people and companies who are tax-exempt, and as Hans says you'll be needing an aspirin.
Not all US outsourcers ask for it.
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Valery Kaminski
Belarus
Local time: 17:39
English to Russian
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TOPIC STARTER | 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... See more 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. ▲ Collapse
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| 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 ... See more 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. ▲ Collapse
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Paul Lambert
Sweden
Local time: 16:39
Member (2006)
Swedish to English
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| Finally got one of those things | Dec 20, 2010 |
Finally today I got one of those stupid things.
Firstly, the company who gave me the job did so through its UK office. While it was made clear that payment would be made in US dollars, there was no indication until after the job was done and my invoice sent off that payment would be made via the US office.
Hence, this request to fill out a W8BEN form *after* the fact.
It is made clear that US law requires my customer in the US to have such a form, but that ... See more Finally today I got one of those stupid things.
Firstly, the company who gave me the job did so through its UK office. While it was made clear that payment would be made in US dollars, there was no indication until after the job was done and my invoice sent off that payment would be made via the US office.
Hence, this request to fill out a W8BEN form *after* the fact.
It is made clear that US law requires my customer in the US to have such a form, but that does not mean that I am subject to such jurisdiction. Do people who live in the US who order things from abroad also request their suppliers fill out W8BEN forms?
I have absolutely no employees or investment in the US at this time. My not filling out the form does not entitle my client to withhold payment as far as I am concerned.
Instead of the form, I will be sending a copy of my Swedish tax certification substantiating my tax status here (in Sweden). They can keep it on file and in the unlikely event the client is audited, the IRS can contact the Swedish authorities instead. I do NOT want my signature on anything issued by the US government (or any government for that matter). I avoid it like the plague.
I just get the feeling that this client, a new one at that, it setting me up for an excuse not to pay me.
I hate income tax. ▲ Collapse
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John Fossey
Canada
Local time: 10:39
Member (2008)
French to English
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| US based client needs it to be allowed to pay full amount | Dec 22, 2010 |
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 app... See more 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] ▲ Collapse
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Blanka Salkova
Czech Republic
Local time: 16:39
Member (2007)
English to Czech
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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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