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
Thank you Legend ! You sure need a tip jar here mate.
Thanks Daniel. On Q 4 should you tick corporation always or since I have a trust and trustee entity should I select “Simple Trust” ?
I am sorry I can’t advise you on this.
You are an absolute legend. Thank you so much for this! Was about to drop $500 on a USA tax attorney
I don’t suppose you have any idea how to fill this form in if you are a non-profit organisation?
Karen fortunately not. The less I have to do with the IRS the better!
This is great i have never seen someone do so much without charging!
Thank you for the detailed explanation – and making this available publicly. Much appreciated!
You’re such a life saver mate! I was pulling my hair for the past two days and wondering how am I ever going to fill this ‘super simple’ form until you actually made it one. A million thanks!
Just another grateful comment – thanks for putting this together.
Seems like they’ve updated this again, but your post still made it possible to fill out, that Article and Paragraph info is gold!! Please let me buy you a coffee / beer some time!
I just checked and I think I have kept the instructions up to date – the last change to the form was in Oct 2021. What is wrong?
Just wanted to send a huge thankyou for this. My accountant wanted to charge $1500+gst for this information. You definitely need a tip jar! x
This was incredibly useful. I dived into each of the definitions and checkboxes just for peace of mind and yes, everything checks out! Great work.
Awesome, MANY thanks Daniel!
Daniel , you are saviour. You made this complex 12 pages document so easy to chew up. Most generous of you to put in online free of charge. Big Thank You
You are a complete legend. Thank you times 1,000
Yep thank you for making that a less painful process. I wish I’d found your instructions the first time I treied to fill it out!!
Excellent. Feel like I owe you a beer or two.
Thank you. I went to a US attorney and our own DFAT. DFAT were no help. The US attorney said “my review of the form would indicate that your status is a passive NFFE. You would complete paragraph XXVI, click 40a and b.”. I have submitted as such to our US customer but it will probably be rejected again. Then I will follow your very clear advice. The form and the instructions are a nightmare. Thank you for taking the time to help us out. It is most appreciated.
You absolute legend, I also owe you a beer.
Thank you Thank you Thank you!
Your a lord. Thanks for putting in the yards to decode this very ‘simple doc’. Many thanks, I was stumped.
Thank You so much for taking the time to help others this step by step guide is brilliant and made it so easy to complete, I for one very much appreciate it……On trying to read and understand this document I was quickly losing the will to live. Thanks again !!
This saved me a lot of time – thanks so much!
Thank you. Was stuck on the treaty part. huge help!
Fantastic – this was driving me crazy. Saved me so much time and $. Thanks.
Thank you very much
You are legend !!!
You are legend !!!
Hey Daniel, you are the man, I would never in a millions years have been able to fill out the minimum requirement, even their phraseology is different. Thanks so so much, regards Lloyd
Like everyone else, thanks for this. Extremely helpful!!
Thanks you so so much!!!
Almost turned down a great business opportunity in The US because I couldn’t work out how to fill in the form (or find any useful information to assist me). Thankfully I’m a good researcher and found your page.
You’re a legend! Thanks for sharing this.
Thank you. This is a life saver.
You are the best. Thankyou
God bless your cotton socks!!
Thank you so much, this was a fantastic help.
Thank goodness there are people like Daniel in the world who take the time to help others for the pleasure of doing so.
I can honestly say that in my 60 years on this planet I have never before come across such an unintelligible form !!!
God bless America
Thank you *so* much.. you rock.
Mate, You are absolutely legend. Thank you. Saved me so much time and consulting.
I love how you have to cite the Article and Paragraph of the tax treaty for the US government NOT to dock your invoices. God Bless America.
Thank you very, very, very much!! This has been so helpful and I’m very grateful that you have so generously shared this. You are helping so many people!
Legend!! Thanks so much.
This is so generous and awesome and clever of you
Thank you so much! This was really helpful
What all the above reviewers said! Champion.
Thanks a million for this advice – what a shamozzle!
You are my hero!! Thank you so much!!!
Brilliant. Thanks so much for your help.
Definitely the most amazing form I have ever encountered.
Very, very helpful. Thank you so much!
Thank you! I can finally get paid properly!