How to complete the W-8BEN-E Form for Australian Companies

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The IRS seems to be over just making the life of Americans a misery and they have decided the whole world should experience their special attention. If you are a foreign business with no presence in the USA, but you have US customers, you need to complete and provide your customers with a copy of the W-8BEN-E Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities).

This form is eight long pages of IRSese with such easy to understand terms as “Nonparticipating FFI (including a limited FFI or an FFI related to a Reporting IGA FFI other than a registered deemed-compliant FFI or participating FFI)”. If anyone know what this means please post, because nobody at the IRS seems to know – at least nobody who answers the phones.

When faced with completing this form for the first time it is near impossible to know what you need to fill in and the IRS instructions are as clear as mud. To save other poor Australians the nightmare of completing the W-8BEN-E form here is my step-by-step guide for standard Australian companies (i.e. those owned and run by Australians) of what you need to do.*

*Disclaimer. I am not a USA tax lawyer or accountant! Use this guide as a starting point for knowing what you need to do and always consult a professional. Do not use these instructions if you are a US citizen or have a US company branch.

Edit. The IRS updated their form in 2016 so I have updated the instructions. Amazingly they have made the form even more complicated – there really is no form too complicated that the IRS can’t make it worse.

Edit 2. Once again the IRS has updated the form in 2017 and so the tread mill continues. I am sure everyone will be surprised to learn it is even more complex.

Step 1. Get the W-8BEN-E form
1. You can download the W-8BEN-E from the IRS website. If the form has moved then just google for it – the IRS seems to like to move forms around on their website fairly regularly.
2. Print out the form as it is easier to fill it in by hand and scan.

Step 2. Complete Part I
Question 1. Write your full business name (eg. “xyz pty ltd”)
Question 2. Write “Australia”
Question 3. Leave blank
Question 4. Tick “Corporation”
Question 5. Tick only “Active NFFE. Complete Part XXV”
Question 6. Write your registered business address in Australia
Question 7. Write your mailing address in Australia. If it is the same as 6. then just write “As Above”.
Question 8. Leave blank
Question 9a. Leave blank
Question 9b. For “Foreign TIN” write in your company’s ABN.
Edit. Technically, your company’s tax file number is the TIN, but some sources suggest that you supply your ABN, not TFN (others say TFN). I am much happier to supply people with my ABN rather than TFN. I suspect in the end it does not matter too much since the ATO has the ability to crossmatch your ABN and TFN – the whole point of this form is for the IRS and ATO to share data on company income.
Question 10. Leave blank.

That is the easy page 1 taken care of! Now to page 2.

Step 2. Complete Part III
Question 14a. Tick the check box and write “Australia”.
Question 14b. Tick the check box “The beneficial owner derives the item (or items) of income for which the treaty benefits are claimed, and, if applicable, meets the requirements of the treaty provision dealing with limitation on benefits. The following are types of limitation on benefits provisions that may be included in an applicable tax treaty (check only one; see instructions):”
On the 14b. sub-question choose: “Company with an item of income that meets active trade or business test”. This is assuming most of your business activity is in Australia.
Question 14c. Leave blank
Question 15. Write “Article 7, Paragraph 1” for the claiming provisions line; “Zero” for the % rate; and “Business Profit” for the type of income line. For the explanation write “Australian entity with no US permanent establishment deriving business profit not subject to withholding tax under the USA-Australian tax treaty. Skip to page 7.
Edit. For non-Australian companies you should be able to find the corresponding article number for your country’s tax treaty with the USA (the treaties are all listed on the IRS website). You will need to read through your tax treaty to find the right article to use (look for the article concerning “business profit”). For example, in the UK-USA tax treaty the article number is the same as Australia’s (Article 7).

Step 3. Complete Part XXV
Question 39. Tick the check box (assuming the three points are true which should be the case if you are a standard Australian company).
Skip to page 8.

Step 4. Complete Part XXX
Sign the form, print your name, and write the date with dashes. Don’t forget to use the crazy USA system of putting the month first.
Tick the box that says that you have the capacity to sign (assuming you do).

Step 5. Scan
Scan the document. To keep the size manageable scan it as a B&W document at 200 dpi and save as a pdf file (it should be under 500 KB). You can then email this when you send invoices to your USA customers. The form is supposed to be valid for 3 years.

/s Now wasn’t that simple! Thank you IRS for making this form so easy and providing such clear and simple to follow instructions /s.

169 comments on “How to complete the W-8BEN-E Form for Australian Companies
  1. Thank you for providing this invaluable service Daniel. Really appreciate stumbling across your website. Cheers, TB

  2. Thank You Very Much Daniel !!!

    Such a shame I wasted hours trying to make sense of the IRS forms prior to finding your article.

    Kind regards,

    Tracey

  3. OMG! what can I say that hasn’t already been said.. you’re an absolute legend!

    I have no idea how I would have completed this form without your notes!

    Thanks very much :-)

  4. The purpose (I assume) of signing the form is to claim exemptions from U.S. tax given that we will need to pay Australian tax for trading in the U.S.; however, you’re expected to sign a declaration that you have no connection with trading in the U.S. Um…can anyone explain that to me?

  5. Thanks a lot for this. You’d think that Austrade would provide this info, or even better, have worked with the IRS to include the item 15 magic in the official IRS instructions (which as they stand suggest you leave item 15 blank).

  6. M the purpose of this form is so the company in the USA who is paying you does not need to withhold some of the payment to you (i.e. withholding tax). If you are an Australian company with no US arm then you are exempt from the withholding tax under the USA-Australian tax treaty.

  7. Hi Jason – yes you would think so, but maybe they don’t want to get into the legal issues.

    As I make very clear in my post this information is just provided so you have an idea of what you need to do. You should consult an accountant or lawyer with experience in this area and not just rely on what some guy on the intertubes says. Ultimately by signing this form you are taking legal responsibility for it being complete and correct.

  8. Hi Daniel, awesome post, thanks so much.

    Reading the official instructions for the form regarding Line 15, it doesn’t say anything about Australia but mentions other countries by name. Also unsure what “business test” means in 14b.

    I guess my overall question would be, why would Australian companies in general (which is what this post is for) need to include specific exemptions and quote the treaty? Wouldn’t ticking box 14a that says we claim the tax treaty benefits between the two countries be enough? Thanks!

  9. Phil this form is for the USA end. If you don’t include that that rate is zero they almost certainly won’t know that the rate is zero. I guess that in theory the rate might be higher than zero for some tax treaties.

    When it comes to the IRS it is always best to not leave anything to interpretation :)

  10. Daniel, I think you’ve found a new career as a US Tax consultant! My US customer (a sizeable organisation) had sent me the W-8BEN individual form. I had previously completed the W-8BEN for other situations but suspected it was the wrong form for me to complete for my company! After finding the W-8BEN-E form, like many others who have left comments above I baulked at completing it & wasted some time trying to decipher it, getting deeper and deeper into US Tax laws, until I came across your instructions! You saved me – I owe you a beer!

  11. Jon I don’t know about that :) I am just another poor Australian who had to struggle through this IRS nightmare. I can’t imagine what it must be like for the poor americans having to deal with the IRS on a regular basis.

  12. My god how do I offer my thanks for this article?!

    Daniel, we are your standard Australian Company so all your instructions applied fine, but my director thought it would be wise a while back to start up an LLC in the USA. Whilst it has a name, a physical address and an EIN, that’s about it. No employees or anything.

    Does this affect the form filling?

  13. Hi Peter

    I can’t really advise you on what you should do if you have a USA division. You need to talk to an expert (US tax lawyer) in this area.

  14. Hi Daniel,

    What if the company is a passive NFFE? i.e. Australian company purely for investment and derive US income from dividends etc?

  15. Andrew I can’t advise here, but I suspect if you have US income you are going to have to deal with the IRS. You need to get advice from an expert in this area.

  16. Daniel! You are a hero!! Untangling the IRS muddle, one horrible clause after another, cannot have been an easy task. Thank you so much for providing this walkthrough!

  17. Hi Daniel,
    I recently completed a W-8BEN-E form via an online interview through Amazon. I forwarded the inventory to Amazon FBA but, it is now held up by US customs. Although I sent them a copy of the completed form, customs are still asking for a US Federal taxid. As I understand it no such number exists relevant to the W-8BEN-E form. Is this correct?
    Any help in this matter is greatly appreciated.

  18. Hi David – the W-8-BEN-E form is to allow US companies to pay you here in Australia without having to withhold 30% of the payment. It has nothing to do with customs duty when you are sending something to the USA. You need to get the help of the shipping company you used and Amazon to help sort this problem out.

  19. Hi Daniel,
    So happy to have found this – been it this for 4 hours already with absolutely no clue!! I am filling this in on behalf of a simple trust we have (have worked that one out I think) . is it possible to guide me through this please.

  20. Hi Daniel, This guide was so good and so helpful. You have saved me from a late night trying to sort this crazy form out. How the IRS think that foreign companies would be able to follow their instructions is unbelievable. Anyway, thank you soooooo much. A great fellow Aussie.

  21. Charlie – yes the form is a nightmare. I don’t think the IRS is going out their way to make it this way, it is just the way they do everything. Consider yourself very lucky to not have to deal with them on a regular basis.

  22. Thanks for this!

    On the point about the percentage, I believe if you are receiving royalties the percentage is different and may not be able to claim 0%. I’m not sure exactly why, since it all balances itself out in the end and there is no double taxation due to the treaties, but it seems that according to the treaty (https://www.irs.gov/pub/irs-trty/aus.pdf article 12) royalties may be taxed at no more than 10%.

  23. Hi Sam – this is really a more complex problem than what I am addressing. This step-by-step guide is just for standard Australian companies selling things to US customers. If you have anything complex like royalties, trusts, dividends, etc then you need to see an expert.

  24. Oh yeah for sure! I just wanted to mention it because I’m sure people wanting to sell software on US-based app stores will see your advice (that’s why I’m here!) and for some US-based stores (the Amazon app store does this) the payments are not “business profits” but “royalties”. It’s important to check whatever agreement you sign with the store.

    Great blog by the way! I’ve just discovered it because of this post, but I’m reading through some of your other posts and it’s really great writing!

  25. Daniel, I am not a corporation just a business name with an ABN. Do you think the W8-BEN-E is appropriate in my case?

  26. Thank you for the clear guide. I completed my form ages ago. Client has just come back to me with a number of questions (fyi: I provide consultancy services, 90% of the work is done outside the US but 10% is a working session in the US). They are asking me: 1. Could you please confirm if service was rendered inside US or outside US? If inside US, please confirm if the person has physically travelled to US or not.
    2. For the W-8 Ben –E form, assuming the person physically travelled to US during performance of service, Could you please complete the Part I 9a/b in page 1 of this form?
    What is the impact of “where the service is provided” on withholding tax? any help appreciated

  27. Johnnie

    Do you have the right visa for working in the USA? Do you have a social security number? I am not a lawyer, but I would strongly advise you to get in contact with one ASAP as you might have just made life very difficult for yourself.

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