W-8BEN Form and why it is required
The W-8BEN is an Internal Revenue Service (IRS) mandated form to collect correct taxpayer information for individuals who do not reside in the US to document their status for tax reporting purposes. As there is a tax treaty between Canada and the US, this reporting ensures that there is no “double taxation” on eligible investments if applicable.
A completed w-8BEN form confirms that:
- You are not a resident of the U.S.
- You are the owner of the income for which the form relates to.
- You are claiming a reduced withholding tax rate because you are a resident of a foreign country with which U.S has an income tax treaty.
W-8BEN Expiry and Renewal:
The W-8BEN form must be updated every three years, even if there was no change in your personal information. If the W-8BEN form expires and is not updated any U.S. source income will be subject to 30%withholding tax.
Income from a U.S payers:
- Interest
- Dividends
- Royalties
- Rent
- Premiums
- Annuities
- Compensation
Article Written By: Feda Shureih
Posted in News
