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 tread mill continues. I am sure everyone will be surprised to learn it is even more complex.
Edit 3 (2019). The IRS has made the form even more confusing again so I have updated the instructions. 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 – this post is never going to die.
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”. Don’t tick the “yes” or “no” box for 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 “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 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 company income.
Question 10. Leave blank.
That is the easy first 2 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 (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.
Thank you so much for this. Hugely useful!
Great help, thank you so much!
Don’t know how else one would manage this form.
As everyone else has said, thank you so much for this. I tried reading the IRS’s instructions for the form, but would you believe (I think you would) that the initialism “NFFE” is not expanded anywhere in those instructions. How the bloody hell are we meant to know that we are an NFFE if you never expand on it?
Thanks so much. You need a “tip” button so we can make a donation.
Just used your guide to fill out the (otherwise incomprehensible) form. You just saved my Sunday afternoon. Legend!
Thank you very much!
A big THANK YOU Daniel !
You have made easy what is really a very very confusing form….
P.S. The same article and paragraph is also valid for Spain.
Great contribution and help!
A huge THANK YOU Daniel! Soooo helpful! Much appreciated :)
Thank you so much this is an amazingly useful resource
Thank you! This was really helpful!
Sooooo glad I found your site. This just saved me hours and a massive headache. Thank you so very much!
You should set up a Patreon account – I would gladly buy you a coffee for this.
LOL. I am just glad this post has helped so many people.
You, sir, are a dead set legend! Thanks for being a bureaucratic sherpa!
Wow thank you so much for your help. Such a relief to have this completed.
Massive thank you Daniel for sharing these instructions! I had no idea how to fill in this form and was so worried about it until I stumbled across your page. Thank you for being a great human!
Thank so much. It’s really helpful. The form makes me sick.
Thanks google for showing me your post in search but even more…..thanks Daniel…YOU ROCK!!
Where is your tip jar??
THANKS DANIEL, THIS HAS BEEN VERY HELPFUL AND SAVED A LOT OF TIME.
Thanks! this was brilliant. It’s not even my first time, but my stomach sank when I opened the envelope.
My eyes are still foggy but I got it done with your instructions!!! for Apple, for App.
Unreal, much appreciated!
Hi Dan, Do you know if as an employer I can get my clients fill out this form electronically on my company’s website using their secure log in details?
For records and audit purposes, I can have my IT guys to securely store the data with user log in stamps to prove that the clients themselves had filled it out?
Daniel, how many hundreds of frustrated hours have you saved for those lucky enough to have found your crystal clear explanation and guide to completion. Take a bow – and that’s coming from a Brit!
It’s hard to get into the minds of those running the IRS allowing documents like W-8BEN-E to be published in their name
Sam I have no idea. I would speak to a lawyer about this as this sort of thing is complex.
Thank you so much Daniel! Legend and yes you do need a tip jar!
This has been immensely helpful (to me and my accountant!). Thank you so much.
This is extremely useful. where is your tip jar?
Excellent Daniel, thank you. In 2006 W-8BEN was a single page. It has truly morphed into a monster.
you should be deriving an income from the IRS… you literally save the US tax payer millions in consulting costs as no mere mortal could possibly figure out this form by themselves without enormous effort or legal/accounting fees. And thanks for being a fast tracked life saver!
It certainly has. All I can say is how glad this form is as close to the IRS as I ever have to get!
Thank you so much!!!! I have been reading everywhere on what this all means. You’ve saved me so much time. Thank you.
Thank you so much for doing this research and posting this article. I echo everyone else’s comments – saved so much time and headache! Kudos to you for figuring it all out. :)
Used this advice today, still working and relevant based on the current form (Oct 2021)
This article has been a lifesaver given 2 accountants that my husband and I use for previous things turned us away, saying they had no US license!
I run a sole-trader operation and did some work for a US company who asked me to fill out this W-8BEN-E form. Is it the same? Please tell me it is!!!
Yes this is the same form.
Thanks this was very helpful.
BTW, how should I fill out a W-8IMY for an Australian company, pty ltd ?
Scott I am not able to help you with that form as I have never had to complete it. It looks complex.
AWESOME thanks so much Daniel.
More info for those interested:
USA Tax Treaty Website
USA – Aus Tax Treaty
AMAZING! Thank you so much, I was losing my mind! I had read the IRS instructions and was even more confused than before! You saved my sanity!
AMAZING THANKS SO MUCH
BRILLIANT! THANK YOU!
You are amazing Daniel.
Thank you so very much for making other’s life easy, God Bless you.
You legend! Thanks very much for this!!
You should leave an area for donations!
You’re a star. nice work
OMG I love you. Thanks for this. That form is a nightmare.
Thank you for this easy to follow guide. Really helpful. The form looks like something you would confront if you went to hell and spend an eternity trying to figure it out.