Developers or freelancers who work with U.S clients will often get asked to fill out the W8-BEN form. Since the IRS website can be a bit wordy, here’s an explanation for what the form is, who needs to fill it out, and how you can go about doing that.
What is the W-8BEN
The Form W8-BEN, is filled out only by non-U.S companies or workers. Basically, if you aren’t a U.S tax payer, you are still subject to tax on certain kinds of income. This is usually a flat rate of 30%. A large amount of money. How do they charge you this amount? Essentially, if you work for a company based in the U.S, they will be liable to pay that 30% to the IRS, therefore, they will withhold that income before paying you the remaining amount. The U.S and Pakistan have a tax treaty – which you will mention in the form – that lowers this rate for most incomes earned.
Who Needs to Fill Out the W8-BEN
Since the W8-BEN is only applicable for certain kinds of income, you need to know whether or not it is a requirement for you. Talk to the company you are working with, and ask them if they need you to fill out the form.
Here is a list of incomes that require you fill out the W8-BEN:
- Certain kinds of interest,
- Dividends,
- Rents,
- Royalties,
- Premiums,
- Annuities,
- Compensation for, or in expectation of, services performed,
- Substitute payments in a securities lending transaction, or
- Other fixed or determinable annual or periodical gains, profits, or income.
The form is valid for 3 calendar years. Make sure you keep your form updated with whatever company requires it.
Guide to Filling out the W8-BEN
Don’t worry, it’s not a complicated form. The form is a simple one-page document, with three parts.
Part 1
This part doesn’t require you to fill out every line. You will need to fill out:
- Name
- Country of Citizenship
- Permanent Residence Address
- Mailing Address (if different from above)
- Date of Birth
You can leave the remaining lines blank. I believe you can fill, and file, the form without an ITIN. You should confirm this with the company asking you to fill the form.
Part 2
Since Pakistan has a tax treaty with the U.S, you will be able to reduce the amount of taxes that are withheld from your earnings. Basically the treaty outlines the taxes levied on Pakistanis doing business in the U.S. This includes royalties, services provided. Please read the document thoroughly the understand the rate applicable to you. You will then provide this information in Part 2 of the W8-BEN.
Part 3
Sign the form, add your name and date.
Important Links
IRS Guidelines for filling W8-BEN
8 Comments
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Rawal Baig
31/12/2015 at 1:12 pm
So, what to fill in the part 2, I’m author in envato market and don’t know much about legal issues so any help would be appreciated.
Thanks
Rawal
Hasan Saleem
17/04/2016 at 12:11 pm
Just write Pakistan after “I certify that the beneficial owner is a resident of”. You don’t need to fill the rest!
Muhammad OxaMa ImAm
12/04/2016 at 11:19 pm
What do I fill in the following textbox in W-8BEN tax information form for UPWORK payment. Legal Name of Business : ????????
Hasan Saleem
17/04/2016 at 12:13 pm
What is the field number for Legal Name of Business?
Waqas
17/07/2017 at 9:44 am
This will help you: https://community.upwork.com/t5/Freelancers/W-8BEN-tax-information/m-p/196122#M113845
Raja nayyer
26/01/2019 at 2:22 pm
Do you have a foreign tax identification number (TIN)? This is a local tax identification number issued
by your country of residence.
If yes, enter the number in the space below:
If no, please explain why you do not have a foreign TIN.
My question is what is my TIN Number as I am only an employee in Pakistan otherwise if no what I explain
ZEESHAN HASNAIN JALALI
23/07/2020 at 8:47 pm
MAM,
THE MAJOR INFORMATION YOU HAVE’NT SHARED THAT WHERE WILL WE SUBMIT THIS W8BEN FORM. CAN WE SUBMIT IT ONLINE. IT MENTIONED IN THE FORM TO GIVE THIS FORM TO WITHHOLDING AGENT, NOW WHO IS THE WITH HOLDING AGENT. I’M A BIT NEW TO THESE ISSUE AND DONT KNOW VERY WELL ABOUT THESE LAW TERMS.
2. ALSO I WANTED TO ASK YOU THAT MY WEBSITE FOR WHOME IM WORKING WITH IS ASKING ME FOR A TAX NUMBER OR A TAX NUMBER OF MY COUNTRY. SO CANT WE JUST SIGN UP ON OUR FBR PAGE AND FILE FOR AN NTN NUMBER AND GIVE THAT NUMBER TO THE WEBSITE WHO IS ASKING FOR IT. WHY DO WE NEED TO FILL UP THE FORM IF WE CAN JUST SIGN UP ONLINE FOR AN NTN NUMBER
PLZ REPLY MY QUERIES, MY PAYMENTS ARE STUCK ON THE WEBSITE DUE TO THIS W8 BEN ISSUE
Shawaiz Ali
08/07/2021 at 11:28 am
Hi, I need W8 Tax document and also NDA, How i find that both document please Guide me, Thanks