W-8BEN (U.S. Tax Withholding)

One of my clients in the U.S. requires me to fill out a W-8BEN IRS form. This is quite normal and probably should have happened with my other clients. It allows them to not withhold 30% of my payments, because I’ll be taxed on that income in my own country, under income tax treaties, and double-taxation would be unkind.

However, to get that exemption, W-8BEN seems to require that I have, or apply-for, an SSN (Social Security Number) or ITN. The W-8BEN instructions suggest that SSN is what I should have, but the suggested SS-5 form for getting one demands that I “provide a document from the U.S. government agency that explains why you need a Social Security number and that you meet all of the requirements for a Federal benefit except for the number.” What agency? W-8BEN told me to get it. W-8BEN, talk to SS-5.

The alternative, ITN (Individual Taxpayer Identification), which I can obtain via a W-7 form, should only be provided if I’m not eligible for an SSN. I’m not sure if I’m eligible.

And both the SSN and ITN application forms seem to rquire that I supply originals of identification documents, usually a passport. I’m not that happy about sending my passport to the U.S. for a few weeks.

Help?

Update: It’s amazing how quickly I can get such good advice via my blog. Thanks. It seems like a visit to the U.S. consulate/embassy is the way to do this.

14 thoughts on “W-8BEN (U.S. Tax Withholding)

  1. It’s a shot in the dark, but perhaps ask your local US consulate about it? Take the tax forms to them and explain, they may be able to give some official document stipulating that they observed your original identification, that you are indeed who you claim to be, and you could send that instead of your passport. Good luck!

  2. It should be easy to determine if you’re elligible for a SSN, you need to:
    – Be a U.S. Citizen, or
    – Need to have been admitted to the U.S. for permanent residence or U.S. employment

    I think we can savely discard the first option and you should know if you ever applied for the second.
    If you never applied, it’s an ITN for you.

    As for sending off your passport, can you get a second passport? In The Netherlands we can get a second passport so that we can still travel to the U.S. after a visit to like Iran, Syria Cuba or whatever country doesn’t go well with the current U.S. administration.

    You could then send an original passport and still be able to travel. Although I would still not like this, thank god I had an EIN for my W8-BEN.

    Good luck,

    Elroy

  3. I was supposed to get one of these in order to publish a linux article. It was too much trouble so I didn’t bother. But it came down to my having to go down to the US embassy and get a notarized copy of my passport or something then send it with an application for a tax number. Given the cost ($30US) + travel time, I just could not be bothered. Your US embassy could help you.

  4. Elroy is right, since you are not a US citizen or are in the US on a valid visa the taxpayer ID number is the way to go. Luckily for you the IRS has a full-time office in Germany which should be able to assist you:

    Tel: [49] (30) 8305-1140
    FAX: [49] (30) 8305-1145
    Phone service: M-F 9:00 a.m. – 1:00 p.m.

    Good luck,

  5. I don’t believe you actually have to fill in that form. I was in the same situation as you. As far as I can tell, it’s not made particularly obvious on the form itself, but I think it only applies to people who are actually physically _in_ the U.S. when the work in question is performed. As far as I can tell from the IRS site, a foreign national who does work-for-hire for a U.S. company without being actually present in the U.S. does not have to deal with the IRS at all; the income is between you and the tax agency of the country where you actually live. If the company in question happens to be OSDL, just fax in the contractor agreement with a handwritten note to this effect – that’s what I did, and my check came in the mail the other day.

  6. As a follow-up, see Drewbert’s post here:

    http://www.associateprograms.com/discus/sutra67924.html

    “The W8BEN form is only required to be filled out for US SOURCED income. Now “US Sourced” doesn’t mean where the person writing the check is, it means where the work was done by the PAYEE.”

    In other words, work you do while not physically in the United States is “foreign sourced” income and doesn’t require a W8BEN.

  7. Also, unless you’re a full-time employee of the U.S. company (which it sounds like you aren’t), they shouldn’t have to withhold taxes at all. U.S. nationals doing contracted work are responsible for their own taxes, I don’t see why it would be different for German nationals.

    I’d contact the IRS’s Germany office first rather than the U.S. consulate – the consulate may not know much about it.

  8. Hmm, you really should call the IRS. In my situation I needed the form even though I did not do any work in the U.S..

    I work for a company that is wholly owned by a U.S. Company. The U.S. Company gave me stock in the U.S> parent company for work performed in the Netherlands. So it looks like there are cases where you do not work in the U.S. and still need this.

    The IRS should be able to tell you all you need to know, it’s their rules after all :)

  9. hi murray,

    just saw your entry on planet gnome. i currently got exactly the same problem (living in germany; being a german citizen; starting to work for a US company). i would be very happy if you would continue to blog on this issue.
    guess i’m going to call the IRS at berlin tomorrow. :-/

    if you’re planning to go to this year’s guadec, i owe you a beer. ;-)

  10. Useful links:
    http://www.irs.gov/pub/irs-pdf/fw8ben.pdf

    and very important – instructions:
    http://www.irs.gov/pub/irs-pdf/iw8ben.pdf

    I had situation with royalty payments… but, as it is written in instructions, all I needed to do is to provide W-8BEN form and establish that I am foreign person – and as such are not subject to withholding of 30%. Basically, I just entered my address, name and signed the document (no tax number needed, since I am not a US citizen). Most companies make things really hard when they are actually not.

    This, actually has no direct connection with your problem (working for US company in foreign country), but since I found this site when I googled for my withholding royalty problem – I decided to post the solution…

  11. The W8BEN is not required for non-U.S. affiliates unless you have equipment or employees in the U.S. Beware of the Esellerate affiliate program. They decided as of January 1, 2008 that the W8BEN is now ‘legally required’ from all affiiliates for ‘identification purposes’. I am a Canadian with no U.S. Activities, and therefore not required to fill out any U.S. tax forms. I sent them a declaration of non-U.S. activities but they deemed it “insufficient” and decided, therefore, their appropriate course of action was to steal my account balance.

  12. I am a tax law student, I am asked to answer “DO YOU NEED A W-8BEN IF YOU ARE PAYING A LAWYER,ACCOUNTANT OR A CONSULTANT IN CANADA?” & “WHAT TREATY IS U.S. AND CANADA BOUND BY FOR TAXATION PURPOSES”. Can you guys please help me!

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