If you are working with a US company and getting paid for your work or services, then you will have to fill out W8BEN-E form. Your work could be as simple as a freelancing work or getting paid for Advertising revenue on website/blog , including affiliate revenue or software services. There are two variants of this form, one is for individuals and other is for corporations or firms registered. It would be clearly written on the top of the form. See below screenshots.
If you are an individual, it is pretty straightforward, but the complexity comes when you have to do this as an entity or corporation or Private limited. We have registered ourselves as a Private Limited Company in India and below is our experience. Having said this, the structure and fields is same for you to fill, even if you are from United Kingdom(UK), Australia or Canada. You only replace the country with your country name. I have read a lot of information and came to this conclusion after reviewing tax treaties as well. Anyways, let’s look at how to fill the W8BEN form.
Guide to fill Part I of the W8BEN-E Form
- Field Number 1 : Enter the registered name of the company. It should be the official name on your company incorporation documents.
- Field Number 2 : Country where your company is registered. In our case, it was private limited registered in India, so it is India for us.
- Field Number 3 : Leave it blank, unless your private limited as single owner.
- Field Number 4 : Select as corporation, if yours is registered as a private limited. If yours is a partnership firm, then select partnership.
- Field Number 5 : This is probably the most confusing part for many. I literally spent hours reading what I should select. In simplistic terms FFI stands for Foreign Financial Institution. I am assuming, you would not be reading this, if you were a financial company as you would work with property tax and finance people. For most of the kinds of corporations or partnership firms, in our case Private limited, you should select Active NFFE, it stands for Active Non-Financial Foreign Entity(NFFE).
- Active NFFE means any company that satisfies these two conditions.
- The firm/corporation should gets 50% or more revenue from active business transactions or services and not passive income sources. Passive sources include revenue streams like property rental, interest, etc.
- The firms/corporation’s 50% or more assets should produce non-passive income. Meaning you cannot have assets like rental property assets over 50% of the company’s assets.
- Active NFFE means any company that satisfies these two conditions.
- Field Number 6 : Enter your corporation’s registered address and country as required. In our case, it is India.
- Field Number 7 : If you have different communication address, enter the same here.
You can see below how it all looks and how we have filled it in screenshot.
- Field Number 8 : In the past you were required to have an US TIN Number, now it is not required anymore. You can just enter the Tax Identification Number corresponding to your country. If you are from India, you would enter the PAN number here. If you also have US Employer Identification number or TIN, feel free to enter that information as well. It will not hurt, but if you don’t have it, not to worry, enter your country specific tax number. See below.
After this field, you go to Part III Claim of Tax Treaty Benefits.
Also, you can watch the video and fill it, check out the YouTube Video.
How to fill Claim of Tax Treaty Benefits on form W8BEN-E Form
Field 14 a & b : If you are from India, Canada, UK, Australia you have to select Tax Treaty option like below for . If you are from different country, please check US Tax Treaties Countries Table Document . If you see the name of the country, means you should select the tax treaty option. Usually, you select option b as well. We have selected a & b as we are focused on getting advertising revenue for our sites from US vendors.
Update : If you are seeing this different, it is because the above is an older version of the form, please check the Latest W 8BEN E form Guide Updated with latest version of 2017
Now that you are done, there is nothing you need to fill in the middle, leave everything blank and go to section
How to fill part XXV – Active NFFE :
Field 39 : This is pretty self explanatory, but you can read the same. It is same as I described above on revenue the company makes and assets the company holds. If your company’s over 50% revenue is not passive and over 50% of assets are also not producing passive income, then you select this. In general, for most of the companies this is true.
Now, you go to the last part of the form
How to fill part XXIX Certification part on W8BEN form
You need to have authority to sign this form like Director or Managing Director or CEO, CFO etc.
Field 43 : You check the box and sign and put in your name, including the date on the field next to it.
It may look scary, when you are a small entity like ours and registered a private limited, but is pretty straightforward, if you follow the above steps. You should always check IRS W8BEN Form instructions page to get full details of instruction and updates.
What has been your experience with the form ? Share your experiences.
Hey — this was super useful. Thanks for taking the effort to do this. Appreciate it!
I use amazon fba, selling electronics components
do i also select Active NFFE ?
i dont have a location in that state
i dont have an employee in that state
i dont have a dropshipping partnership in that state
i dont have affiliates in that state (don’t worry about Amazon affiliates here)
i dont physically sell products there in person
i do have store inventory there (FBA amazon usa)
Hi, how much % should be specified in the #15 as % rate of withholding ?
Hello Sir,
This was very helpful. Thanks so much.
The recent latest W8BEN-E form has some more check boxes under PART-III section 14. Can you please guide us for Indian companies what to check there. The form you are using do not have that.
Thanks a lot in advance.
Best regards,
Sampa
Hi Kumar,
Very useful information
Hi,
Do we need to fill this even if the US entity is remitting money for instances other than sale of goods or rendering of services?
Lets say, an error in transferring funds to a US entity, for which they are remitting back the funds to us. Do we still need to fill the form?
Saved a lot of time and somehow I totally trust you. 🙂
Thank you very much!
Nade
Thanks, Kumar. This was really helpful.
I spent more than an hour reading about it and couldn’t find anything that was remotely useful. You saved me a ton of time and frustration.
Thank you for sharing this.
Cheers 🙂
Akram,
Thanks for nice words !
Kumar,
This is too good – you saved us time. I have been searching for simple instructions on how to fill the form for Indian Pvt Ltd Companies and your article is so relevant and easy to follow.
Kudos to you
Hi
The shared document was so helpful to me.
Filing the document I got stuck in Part III [Claim of tax treaty benifities]
My company is from UAE and on checking the https://www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z . The UAE does not have a treaty with the United States so should I have to fill Part III section or leave it blank. Please help..
Thank you so much for such a detailed document. My sincere thanks to you. In the new form I have ticked “Company with an item of income that meets active trade or business test”. I hope its right.
Cheers !
Hi Kumar,
Thank you for taking efforts to put this together in one place.
I really appreciate it.
I have one quick question – What form should I choose for Proprietorship?
Hi Kumar,
Any idea what firn should I choose for Proprietorship?
Thank you
Dear Kumar,
Your information about field 5 is contradictory as in the form it says passive income and as per your explanation its non passive income.
Please confirm which is correct.
It is active NFFE, that’s what is written. I did not get what is contradictory, it is pretty clear, please clarify what you mean..
It’s excellent, very clear step by step guide.
Thanks a lot
Hi, I am confused which checkbox to choose from in 14b. We are advertising company with clients in US. Thanks,
Check the Latest Article that has updated info on 14B
This is an amazing post and the video was awesome too! I have a couple of questions if that’s ok.
I am a consultant based in Argentina. “Company” is a big statement for me, as it’s just me. I do have an account in a US bank where I can receive payments, and I can create an invoice in the US. Still, I was asked to complete the W-8BEN-EN form.
Should I do so? I don’t think I apply, maybe just as I’m an individual and I would receive payment in the US.
Could you confirm?
Thanks!
You have an alternative version of W-8BEN0E form that is for individuals, you can use that. Check this IRS link
This is very helpful. Thanks for putting this together. Can you guys confirm if this form contents (as you have filled them) makes the US paying company take off 30% US tax witholding or not? That is what I am more fearsome of.
No, they will Not take off anything as you are not based out of US and dont need to pay corporate tax in US.
In the newer version, there are a bunch of other checkboxes below line 14B. Since India and US have a Limitation On Benefits (LOB) Clause (Article 24 of the tax treaty), you will have to select one of the options. In most cases you will select “Company that meets the ownership and base erosion test” which means that :
(a) more than 50 percent of the beneficial interest in such person (or in the case of a
company, more than 50 percent of the number of shares of each class of the company’s shares)
is owned, directly or indirectly, by one or more individual residents of one of the Contracting
States, one of the Contracting States or its political subdivisions or local authorities, or other
individuals subject to tax in either Contracting State or their worldwide incomes, or citizens of
the United States; and
(b) the income of such person is not used in substantial part, directly or indirectly, to
meet liabilities (including liabilities for interest or royalties) to persons who are not residents of
one of the Contracting States, one of the Contracting States or its political subdivisions or local
authorities, or citizens of the United States.
Thanks for adding your updated info !
Hi,
I have a Pvt Ltd in India and want to sell business services to US firms. Do I claim provisions from Article 7 as “Business Profits” or do I claim provisions from Article 12 as “Included Services” while filling Section 15, Part III of form W8BEN E?
If its Article 7 i.e Business Profits then the withholding rate is 0% right as I don’t have a permanent establishment in the US?
If it’s Article 12 then I’m confused whether I satisfy the conditions for “Included Services” or not and if I do what is the amount of withholding rate that will be applied.
My employees are in India and some freelancers hired on upwork are based in the Philippines. The services I’m providing are lead generation and advertising as well as content creation occasionally.
Would really appreciate some clarity on this!
-Soham
Did you get the answer.c an you please share with us…