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 (2016). 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 (2017). Once again the IRS has updated the form in 2017 and so the IRS tread mill continues. I am sure everyone will be surprised to learn it is now even more complex.
Edit 3 (2019). The IRS has made the form even more confusing (again) so I have updated the instructions (again). My thanks to the IRS for making this post evergreen.
Edit 4 (2021). The IRS has made the form even longer. I have updated the instructions again – it looks like this post is never going to die.
Step 1. Get the W-8BEN-E form
1. You can download the W-8BEN-E form 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 just to keep things interesting.
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”. Don’t tick the “yes” or “no” box on the line “If you entered disregarded entity, partnership, simple trust, or grantor trust above, is the entity a hybrid making a treaty claim? If ‘Yes’ complete Part III.”
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 the “Foreign TIN” write in your company’s ABN.
Edit. Technically, your company’s tax file number is the TIN, but some have suggested 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 doesn’t 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 a company’s income.
Question 10. Leave blank.
That is the easy first two pages taken care of! Now to Part III (you can skip Part II).
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 (all the tax 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 where you put 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
You are a legend. Made the ridiculously hard, easy.
This post has been a life-saver on so many occasions! Thank you SO much for this, you definitely are a legend!
Whoever wrote this, thank you. You are an absolute Australian hero for making this process simple and quick.
Hooray! thank you for this, I’m so grateful. Hope you’re staying safe and sane.
I don’t even know how much time you saved me today by listing this stuff out. How would we ever know things like Article 7 Paragraph 1. Thank you so much for sharing this and keeping it up to date. You are a legend.
Thank you for writing this. After two months of back and forth with Paypal, then telling me our form is blank, not correct, not sent, upload to the resolution center, the resolution centre telling me they wont accept the form to email it to taxdocumentupload, account limitations, me throwing my toys out of the pram (figuratively), i think we have a winner! thank you thank you thank you :-)
Thank you mate.
You faaarking legend.
Once again you’ve saved me so much grief and time with this ridiculous form, you’re a legend thank you!!
Awesome – super helpful
So Grateful…This journey has been biggest learning curb. IRS forms are so convoluted & difficult to understand. Thank you so much for your post.
So the idea is to give this completed form to agencies that may wish to withhold Taxes, like Freight, Amazon ect Correct?
Many many thanks – your effort to make this process simple was very very much appreciated.
Oh my god thank you so much for that!! You’re a legend!!
Thank you so much for doing this – I would have had no idea , so grateful to you for taking the time to do this for everyone !!
Thank you so much! I’ve been struggling with this form for years. This is the best post. Amazing.
Thank you so much. This was so helpful!
“Now wasn’t that simple! Thank you IRS for making this form so easy and providing such clear and simple to follow instructions /s” – Legend! :) Can’t thank you enough for this.
You are a life saver!!
Many thanks for sharing this information
Amazing resource – really appreciate you taking the time to write this and keep it updated!
Thanks so much for this! Great resource.
What a nightmare this form is! Thanks a million for putting this out there.
What if I am completing for a company as a trustee for a Self Managed Superfund.
Does all of the above still apply
If I was Tony Abbott I’d give you a Knighthood. That post is indispensable and hilarious in equal measure.
Roxanne I am not a tax lawyer so I can’t advise you on this. You really need to seek out an professional.
YOU ARE A BLODDY LEGEND MATE!! Thank yo thank you thank you buddy!
This is absolutely fantastic, thank you so much from a micro business that only does a little U.S. business.
This just made a stupidly/deceptively complex form super easy for me!
Legendary work mate, thanks for sharing and keeping it updated!
You should monetise this!
LOL. Even if I wanted I on not qualified to provide tax advice. I have been told by a lawyer in the space that he charges $1500 to fill in the form for clients.
OMG – what everyone else said! You are a legend. Seriously thinking about proposing!
Thanks a ton.. Legend you are.
A very valuable corner of the internet, this!!!
Thanks so much – super helpful as the instructions and definitions on the instruction sheet were impossible. Thank you!!!!!
Thank you so much – legend
Thank you so much Daniel, i spent several minuntes scratching my head over this form today and you made the process so much easier and saved me so much time.
Just want to add my thanks, you saved me possibly days and weeks of time, money and needless anxiety.
Why do they make it so hard!?
I think this is just the way the IRS works – nothing is simple about the US tax codes.
Thank you so much for this!
Absolute legend, my hat off to you
You made it look so simple. Thank you!
You’re bloody awesome.
That form is crazy.
No wonder people stormed the white house!
This is the kindest thing I’ve come across on the internet in a while. THANK YOU.
Absolute legend. Saved me a lot of time and my sanity.
Haha, I will reiterate the comments of everyone above. This was the most timesaving post I’ve found in a while
Would have been sitting here the rest of my life trying to work this out, what a nightmare. You are a godsend!
You are my hero for the day!
Thank you thank you thank you!!
You’re a deadset Aussie National treasure. What a headache of a form, there’s no way the average Aussie would be able to fill it out on their own!
Daniel, you are a legend!
Wow. this was amazing and makes sense now after incorrectly filling some W8BENE in past. Thank you very much.
THANK YOU!!! I was starting to lose it trying to figure out which boxes to tick.