What is a W8-BEN?

The W-8BEN form is a U.S. tax document that foreign individuals use to certify their non-U.S. status and claim any applicable tax treaty benefits. Officially called "Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting," it's essentially a way for foreigners to properly identify themselves to the U.S. tax system.

The main purpose of this form is to ensure that foreign individuals receiving U.S.-sourced income are taxed correctly. When you submit a W-8BEN, you're telling U.S. institutions two key things:

• You're not a U.S. person for tax purposes
• Whether you qualify for reduced tax withholding under an international tax treaty.

Think of it as a tax passport – it helps U.S. institutions understand your tax status and apply the right withholding rates when paying you income like dividends, interest, royalties, or service fees. The form remains valid for three years after signing, acting as your ongoing certification of foreign status during this period.

Who should fill out a W8-BEN?

A W-8BEN form should be filled out by any foreign individual who either:

1. Receives income from U.S. sources, or
2. Holds U.S. financial accounts or investments

Remember that this form is only for individual contractors.

You don't need a W-8BEN if you:

• Are a U.S. citizen or resident (you'd use other forms)
• Are a foreign business entity (use W-8BEN-E instead)
• Have income effectively connected with a U.S. trade or business

A simple way to think about it: if you're an individual living outside the U.S. who receives any form of payment from U.S. sources, you'll likely need this form.

What Do U.S. Employers Need to Know About W-8BEN Forms?

If your U.S. company works with international contractors or freelancers, the W-8BEN form is a crucial part of your tax compliance and documentation process. This form helps you determine and justify the correct tax treatment of payments you make to foreign individuals.

Your Responsibilities

As a U.S. employer, you must collect and maintain W-8BEN forms from your foreign contractors before initiating payments. This form serves as your proof to the IRS that you're making payments to a foreign individual and applying the correct withholding rates.

Without a valid W-8BEN, you're required to withhold 30% of payments for U.S. tax purposes. Having this form properly filed can reduce or eliminate this withholding requirement, depending on applicable tax treaties.

Record Keeping

Keep each W-8BEN on file for three years following the last payment to the contractor. While the form itself expires after three years from the signing date, your record-keeping obligations extend beyond that. Good practice includes:

• Tracking expiration dates
• Requesting renewed forms when needed
• Maintaining secure digital or physical copies
• Documenting any treaty benefits applied

The W-8BEN is your protection. It demonstrates your due diligence in verifying the tax status of your international contractors and applying the correct withholding rates.

How to fill W8-BEN?

Let us walk you through filling this form step by step.

First up — before you even start writing:

• Grab a black pen (no pencils!)
• Make sure you've got your ID docs and tax numbers handy
• Confirm you're actually supposed to use this form (if you're a U.S. citizen or company, stop right here)

Now, let's fill it out:

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Part I (The ID Part)

1. Write your name exactly as it appears in your passport — no nicknames, or leaving out the middle name if it's present in your passport.
2. Your country of citizenship
3. Your address. Put your actual home address where you live. Not your office, not your P.O. box
4. Mailing address — Only fill this if it's different from #3

The Numbers Section:

• Line 5: U.S. tax number (if you have one)
• Line 6: Your home country's tax ID
• Line 7: Any reference numbers your broker/bank gave you
• Line 8: Your birthdate in MM-DD-YYYY format (like 03-15-1985)

Part II (The Treaty Part)

Only fill this if you're claiming tax treaty benefits! If you are:

• Line 9: Write your country name
• Line 10: This is the technical part — you need the exact treaty article and rate you're claiming. If you're not sure, ask your tax advisor because getting this wrong can be expensive.

Part III (The Sign-off)

• Read those statements, and sign with today's date
• Print your name clearly below

This is a simple one-page form but there are so many areas where you might end up making a mistake.

The first thing you really need to be clear about is that this form is ONLY for individuals who aren't U.S. citizens or residents. If that's not you, you'll need a different form entirely (like a W-8BEN-E for companies or a W-9 for U.S. persons). If you've got dual citizenship and one of them is U.S., you can't use this form at all.

The trickiest part that we see people mess up all the time is the address section. The IRS is really picky about this—they won't accept a P.O. box or "care of" address. They want your actual street address where you live.

Another thing that trips people up is the tax treaty section in Part II. If you're trying to claim treaty benefits (which could save you money!). You need the specific article number, paragraph number, and the exact rate you're claiming.

If any information on this form changes, you've got just 30 days to submit a new one. Miss that window, and you could have issues with your payments.

Hire International Contractors Without the Paperwork Headache

Managing W-8BEN forms and international contractor payments doesn't have to be complicated. Thera streamlines the entire process, from collecting and validating W-8BEN forms to ensuring compliant payments across 150+ countries.

Our platform automatically handles tax documentation, ensuring you're always in compliance while making it easy for your contractors to submit their information securely.

Our industry-leading exchange rates mean your contractors receive 2-3% more in their bank accounts compared to traditional platforms. That's more money in your contractors' pockets, without any extra cost to you.

Plus, our dedicated Slack support channel means expert help is always just a message away.

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