Many countries impose withholding taxes on payments made to non-residents. This is to ensure that non-resident recipients of payments pay the required taxes owed to the country where the payments originated.

In the United States, details about payments to foreign contractors are collected using Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting).

If you reside in a country that has an applicable Tax Treaty with the United States, completing Form W-8BEN can reduce or eliminate withholdings on your payments.

You can visit IRS: Tax Treaty Tables to identify the applicable tax treaty based on your country of residence.

What is the W-8BEN form and why must I complete it?

Form W-8BEN collects important details about your residency status and any applicable US Tax Treaty. Clients of foreign contractors are obligated to collect this form from each contractor and to retain this form for their own records.

If you live in a country with an applicable US Tax Treaty, you can reduce or eliminate withholding tax on your payments from US clients.

Deel makes it easy to complete this process when signing your contract. The document is then stored on Deel and can be downloaded at any time.

Whether you need to file a W-8BEN or a W-8BEN(E) depends on if you are an entity or an individual. To find official instructions, please check the IRS website details for the W-8BEN and W-8BEN-E.

The form must be completed by all Non-US resident contractors residing abroad to:

Certify their foreign status
Claim eligibility for reduced (or zero) withholding tax on income earned from U.S. based clients under applicable Double Taxation Treaties.

The form asks for personal information, including name, country of citizenship, and permanent address, as well as a taxpayer identification number (TIN) or equivalent if claiming tax treaty benefits.

How the W-8BEN Works

Applicable Individuals	Non-US Independent Contractors residing and working abroad
Required Information	Name Country of Citizenship Taxpayer Identification Number (TIN) or equivalent Specific article of any applicable tax treaty
How it's used	Retained by US Client for their own records to ensure compliance with IRS requirements Prevents overpayment of any applicable US Taxes

What if I live in a country with a tax treaty? Do I still pay US taxes?

If you are eligible and meet all requirements, you may benefit from claiming a reduced withholding rate when you're asked during the in-app completion process.

If you are claiming tax treaty benefits, it is crucial that you are compliant with US permanent establishment rules. This means that you do not maintain a permanent office or physical presence in the U.S., and that your work is conducted from abroad.

You must provide the specific article of the tax treaty that you're claiming, and certify the accuracy of the information under penalty of perjury. This allows US clients to withhold the correct amount of tax—or none, if exempt—on payments made.

Deel cannot provide tax advice to Independent Contractors, including advising on the applicability of any Double Tax Treaty.

Completing Form W-8BEN on Deel

Check Treaty Eligibility: Verify if your country has a tax treaty with the U.S. and determine the applicable withholding rate.
Complete the Form: Follow the steps on Deel to complete the form
Provide the Form to Your Client: Deel will provide a copy of the form to your client to be retained by them
Retain a Copy: Deel will also maintain a copy of the form for you in the Compliance Documents section on Deel to retain for your own records

Claiming Treaty Benefits and Identifying Applicable Rates

Independent Contractors will need to identify the relevant tax treaty, article, and applicable rate when completing the W-8BEN.

Step 1 : Identify Treaty	Use IRS: Tax Treaty Tables to identify applicable tax treaty based on country of residence
Step 2 : Identify Income Type	Contractors providing services as sole proprietors usually fall into one of two categories: Business Profits for income earned while conducting a business without a permanent US establishment Independent Personal Services for income earned from professional or independent activities. Some treaties combine both these categories into Business Profits.
Step 3 : Identify Applicable Rate	Identify the applicable withholding tax rate applicable to the income type. This may range from 0% to a reduced percentage depending on the treaty. Key phrases to search for include: "Income derived by a resident of [your country] from performing independent personal services in the U.S." "Business profits shall not be taxed unless attributable to a permanent establishment."
Step 4: Ensure Compliance With Permanent Establishment Rules	Ensure compliance with permanent establishment rules. This means the Independent Contractor does not maintain a permanent fixed office or physical presence in the US, and the work is conducted from abroad.
Step 5 : Treaty Reference	Add the tax treaty, article number, and applicable rate. Where asked for an explanation, provide a brief description such as: as a resident of [country] I am claiming tax treaty benefits under [Article]
Step 6 : Explanation	Where asked for an explanation, the contractor should provide a description of the applicable article, benefit, and how they qualify. Example: As a resident of [country] I am claiming tax treaty benefits under [Article] for [income tax: business profits or independent personal services income] as I do not have a permanent establishment in the United States

Line Breakdown of Form

Applicable Double Taxation Treaties and relevant articles can be found in the IRS: Tax Treaty Tables.

Field	What It Means	What to Do
Line 1	Your legal name	Enter your name as shown on your passport or official documents
Line 2	Your country of citizenship	Write the country where you hold citizenship
Line 3	Permanent residence address	Provide your physical address in your country of residence. No P.O. boxes allowed
Line 4	Mailing address (if different)	Enter a different mailing address if needed; leave blank if same as Line 3
Line 5	U.S. Taxpayer Identification Number (TIN)	Enter your IRS TIN if required by your applicable tax treaty
Line 6	Foreign Taxpayer Identification Number (FTIN)	Include your tax ID from your home country
Line 7	Reference number(s)	Optional; enter any specific identifier (e.g., client or account number)
Line 9a	Claiming treaty benefits	State your country and its treaty with the U.S.
Line 9b/10	Tax treaty article and rate	Reference the treaty article and specify the reduced rate you’re claiming
Part III	Certification	Sign, date, and confirm that the information is true and accurate

This article is for informational purposes only and is not intended as tax advice. IRS regulations can be subject to change, so check for updates on www.irs.gov. Consult a professional accountant or tax advisor for help with tax laws.