W-8BEN-E Form

The W-8BEN-E form is a common form that needs to be filed by foreign entities who generate income in the US. Foreign entities are subject to U.S. tax at a 30% rate (the foreign-person withholding rate) on income they receive from U.S. sources. In most cases the clients of your company are asking you to fill out a W-8BEN-E form, since the client is the payer of the withholding income and may rely on a properly completed Form W-8BEN-E to treat a payment associated with the Form W-8BEN-E as a payment to a foreign person who beneficially owns the amounts paid. If applicable, the withholding agent may rely on the Form W-8BEN-E to apply a reduced rate of, or exemption from, withholding. Provide Form W-8BEN-E to your client before income is paid or credited to you.

If you receive certain types of income in the US, you must provide Form W-8BEN-E to claim a reduced rate of, or exemption from, withholding as a resident of a foreign country with which the United States has an income tax treaty that is eligible for treaty benefits. The US has an income tax treaty with the Netherlands. Completing this form prevents you from paying taxes twice, in the United States and the Netherlands.

Failure to provide a Form W-8BEN-E when requested may lead to withholding at a 30% rate (foreign-person withholding rate) to the IRS.

You’ll find more information on the official website of the IRS:

https://www.irs.gov/instructions/iw8bene/ch01.html

And on the website of PWC:

https://www.pwc.nl/nl/fatca/assets/documents/newsflash-july14-tax-insights-w-8ben-e_instructions.pdf

For an explanation in Dutch on how to fill in the W-8BEN0E form, check the website of ING. https://www.ing.nl/media/ING_Checklist_W8BENE_tcm162-115335.pdf

Posted by Mariella Priem June 30, 2017

Comments