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W-8-BEN and offshore banking
W-8-BEN and offshore banking

Form W8, W 8BEN is used by non-resident aliens who do work and/or make income in the U.S.

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Written by EQIBank Representative
Updated over a week ago

Form W8, W 8BEN is used by non-resident aliens who do work and/or make income in the U.S. The Form is also used by foreign business entities with income from the U.S. Legal U.S. citizens do not need to fill out this form. (Learn more on the IRS website here and here) Non-US person or entity certifying their non-US status with these forms. Non-US persons and entities, such as foreign corporations, are subject to a flat tax of 30% on certain kinds of income they receive from US sources. An Income Tax Treaty negotiated between the US and another country can lower this tax rate. The tax is withheld at source by the payor of the income, called a “withholding agent,” who pays to the IRS the required tax. Income From US Subject to Withholding Tax.

Certain income is subject to withholding when paid to non-US persons from the U.S. or U.S.-based source. Certain types of interest, dividends, rents, royalties, premiums, annuities, compensation, and many other annual or periodical gains, profits, or income.

Some US source income might not be subject to foreign-person withholding.

Examples include:

  • Broker proceeds (for instance, the sales of US stocks/securities)

  • Short-term OID (183 days or fewer)

  • Bank deposit interest

  • Interest, dividends, rents, or royalties from a foreign source

  • Proceeds from a wager in blackjack, baccarat, craps, roulette, or big-6 wheel.

Form W-8BEN

This form, which demonstrates one is not a US person and that they are the beneficial income owner, is not to be submitted to the IRS. Non-US persons provide Form W-8BEN directly to the income payor. Form W-8BEN must be signed and dated by the beneficial income owner or by an authorized representative. Form W-8 BEN must be kept current; errors can be costly and time-consuming to fix on IRS forms.

Other persons who must fill out these tax forms include

  1. Those receiving pension benefits from a U.S. pension fund while living in a foreign country with an income tax treaty with the US.

  2. When you receive your pension benefits from a U.S. pension fund as a non-resident, the company will likely request you fill out this form.

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