US clients and their contractors will have the opportunity to manage tax forms directly through Deel.
This article provides details about American tax Form W-8BEN and Form W-8BEN-E
In this article:
Should I file an W-8BEN or a W-BEN-E?
What does the W-8BEN look like?
What is my FATCA status for W-8BEN-E?
About the W-8BEN & W-8BEN-E tax forms
Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting) is a tax form that non-US citizens and business entities use to verify their country of residence for tax purposes.
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 IRS's website: W-8BEN and W-8BEN-E.
If you are a Deel customer, you will be taken through an easy-to-process, simplified flow when signing your contract. But the .pdf form that you can download from the Taxes tab of your Dashboard will match the official documents, as seen below.
If you need additional assistance with the W-8BEN, contact us 24/7 and we’ll be happy to help you!
Should I file a W-8BEN or a W-8BEN-E?
Form W-8 is for non-US citizens or businesses to verify their country of residence for tax purposes.
Filling out a W-8 can mean avoiding a 30% withholding tax on US income.
But whether you need to file a W-8BEN or a W-8BEN-E depends on if the IRS considers you an entity or an individual.
Please note that contractor LLCs with only one shareholder are considered individuals by the IRS and must complete the individual form.
You can contact us if you need additional clarification or assistance.
[ACCORDION] You should file the W-8BEN if you are:
- An individual
- An independent contractor
- A sole proprietor
[ACCORDION] You should file the W-8BEN-E if you are:
- An entity
- A company
- An organization
- A trust
If your company is structured as a limited company or if you have multiple employees, you should file the W-8BEN-E.
[ACCORDION] I'm a contractor entity, why am I being asked to complete the individual form?
The IRS disregards certain entities for tax filing purposes. An entity is disregarded if the following conditions are met:
- the contractor type is company
- the entity is LLC
- there is only one shareholder in the company
In these cases, the contractor type will be required to complete the individual form.
What does Form W-8BEN look like?
W-8BEN Form for Individuals
Here is a link to the official form from the IRS.
W-8BEN-E Form for Entities
Here is a link to the full and official form from the IRS.
How to complete Form W-8
Identification of Beneficial Owner (Part I):
For W-8BEN (individuals): Name — Enter your legally given name as shown on your income tax return.
For W-8BEN-E (entity): Name of Organization — Enter the full legal name of your organization. If you are a disregarded entity, enter the name of the entity that owns the disregarded entity.
Address (State, City, Address, Address 2, Zip) — For Address, include the building number and street name (e.g., "52 Market Street"). For Address 2, include the apartment, suite, unit, building, or floor number.
Foreign Tax Identifying Number (TIN)— Enter your tax identification number issued from your country of residence. If you don't have one, put your ID number instead.
Claim of Treaty Benefits (Part II):
If you reside in one of the countries listed below, please select your country of residence under the section “Claim of Treaty Benefits (Part II)”.
List of countries
Armenia, Australia, Austria, Azerbaijan, Bangladesh, Barbados, Belarus, Belgium, Bulgaria, Canada, China, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Germany, Greece, India, Hungary, Iceland, Indonesia, Ireland, Israel, Italy, Jamaica, Japan, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Korea (South), Luxembourg, Mexico, Malta, Moldova, Morocco, Netherlands, New Zealand, Norway, Pakistan, Philippines, Poland, Portugal, Romania, Russian Federation, Slovakia, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Tajikistan, Thailand, Tunisia, Trinidad and Tobago, Turkey, Turkmenistan, Ukraine, United Kingdom, United States, Uzbekistan, Venezuela
Certification (Part III): Sign with your full legal name, and add the date of the signature.
For other sections of the W-8BEN-E Form, check the boxes that apply to you.
What is my FATCA status for W-8BEN-E?
The Foreign Account Tax Compliance Act (FATCA) generally requires that foreign financial Institutions and certain other non-financial foreign entities report on the foreign assets held by their US account holders, or they may be subject to withholding on withhold-able payments.
To file the W-8BEN-E, you must declare whether you are an Active Non-Financial Foreign Entity (NFFE) or Passive Non-Financial Foreign Entity (NFFE).
[ACCORDION] Active NFFE
An Active NFFE is for an entity that has less than 50% of its gross income from the preceding calendar year from passive income, and less than 50% of the assets held by the NFFE are assets that produce or are held for the production of passive income.
[ACCORDION] Passive NFFE
Less than half of the entity's gross income for the preceding calendar year is passive, and less than half of the assets held by the entity produce or are held for the production of passive income. Examples include restaurants and retailers.
If you are interested in knowing more about IRS forms W-8BEN & W-8BEN-E, we suggest you look at our comprehensive guide about them. Please check IRS's websites to find official instructions: W-8BEN and W-8BEN-E.