Tax and Compliance — 2 min

Filing Form W-8BEN-E instructions: What is it and how to file it

Written by Ana Vieira

November 6, 2024

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The W-8BEN-E form can seem complex, but it's an essential document for foreign entities working with US companies.

In this guide, we’ll break down everything you need to know about the W-8BEN-E, step by step, so you can complete the form with confidence and avoid errors.

What is the W-8BEN-E form?

The W-8BEN-E form is used by foreign entities to certify their tax status in order to claim tax treaty benefits, avoid or reduce US tax withholding, and declare their foreign status to US payers. This form is required under US law to help ensure foreign businesses are taxed appropriately, based on their residency and relationship to US tax law.

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Companies and individuals working internationally, such as those in Remote's ICP of tech, professional services, and education, often need this form when receiving US-sourced income.

Who needs to fill out the W-8BEN-E form?

Any non-US entity (businesses, disregarded entities, or partnerships) receiving income from US sources must complete this form. It helps define the entity’s foreign status and ensures the correct application of US withholding taxes. Individuals use the W-8BEN form, while businesses and entities use the W-8BEN-E.

Key terms you need to know

Disregarded entity. A business entity separate from its owner for legal purposes, but taxed as the same entity as the owner in terms of federal income tax. If your entity is disregarded, you’ll fill out specific sections of the W-8BEN-E.
Foreign TIN (Taxpayer Identification Number). A tax ID assigned by a foreign government. It may be required on the form, depending on your country of residence and applicable tax treaties.
Tax treaty benefits. A reduction in US withholding tax rates based on your country’s tax treaty with the US. If your country has such a treaty, you can claim these benefits on the W-8BEN-E form.

link to What is a W-8 BEN form? A guide for US employers

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What is a W-8 BEN form? A guide for US employers

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Step-by-step instructions for filling out the W-8BEN-E form

1. Section 1: Identification of beneficial owner

This section requires details about the entity filing the form.

Line 1: Enter the full name of the entity (not the individual filling out the form).
Line 2: Insert the country of incorporation.
Line 3: Choose your entity type (corporation, partnership, disregarded entity, etc.).
Line 4: Specify the entity’s status in relation to FATCA (e.g., Active NFFE, Passive NFFE).

2. Section 2: Disregarded entities and branches

If you’re a disregarded entity or have branches, this section applies.

Line 5: Provide information about disregarded entities (if applicable). This includes identifying the owner of the entity and their country of residence.

3. Section 3: Claim of tax treaty benefits

Here, you’ll claim any tax treaty benefits that might apply to your country.

Line 9: Check the box if you’re claiming a reduced tax rate under a treaty.
Line 10: Insert the country of tax residence and the specific article of the treaty that applies to your income type. Be precise to ensure correct tax withholding.

4. Section 4: Foreign TIN

In most cases, you’ll need to provide a Foreign TIN.

Line 6: Insert your foreign tax identification number (TIN), or explain why one isn’t required if applicable. Double-check that the number is correct, as this is a common error.

5. Section 5: Certification

This is the final step, where you sign and certify the form’s accuracy.

Ensure all the information provided is correct and signed under penalty of perjury.
The form must be signed by someone authorized to represent the entity, and the signature must be dated.

Common mistakes to avoid

Even small errors can lead to delays or increased tax withholding. Here are a few pitfalls to watch for:

Incorrect entity type. Ensure you select the correct type of entity in Section 1.
Missing foreign TIN. If a foreign TIN is required but omitted, it could invalidate your form.
Failing to claim tax treaty benefits. Missing out on these benefits can result in higher U.S. tax withholding.
Unsigned forms. Many forms are rejected because they are not signed.

When and how to submit the W-8BEN-E form?

Timing. Submit the W-8BEN-E before receiving any US-sourced income to avoid unnecessary tax withholding. Generally, the form is valid for three years, after which it must be renewed.
Where to submit. You’ll usually provide the W-8BEN-E directly to the financial institution or U.S. company from whom you are receiving payment.
Electronic or paper. Many companies accept electronic submissions of the W-8BEN-E, but check their specific requirements.

Final checklist before submission

Before sending off your form, use this quick checklist:

Have you filled in all the required fields?
Did you provide the correct Foreign TIN?
Have you checked the correct tax treaty articles (if applicable)?
Is the form signed and dated by an authorized representative?

FAQs: Common questions about the W-8BEN-E

What happens if I submit the form late? A delay can result in backup withholding at a higher rate, usually 30%, until the form is submitted.
Do individuals need to fill out the W-8BEN-E? No, individuals must use Form W-8BEN, not the W-8BEN-E, which is specifically for entities.
What if I don’t have a foreign TIN? If your country doesn’t issue TINs, provide an explanation on the form, or consult with a tax professional to understand your obligations.
How often do I need to submit the W-8BEN-E form? Typically, every three years, unless your circumstances change, in which case you may need to submit a new form sooner.

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Easily manage and pay international teams with Remote

Global expansion requires a deep understanding of relevant tax forms and requirements. Partnering with local tax experts or investing in payroll tax compliance software can be valuable in navigating these complexities, ensuring compliance, and managing tax costs effectively.

Understanding taxation is just one aspect of international hiring compliance. Remote’s all-in-one global HR platform allows you to recruit, pay, and manage both employees and contractors quickly and efficiently. From recruitment and onboarding to taxes, payments, and compliance, Remote handles all the admin tasks involved so that you can focus on growing your business.

Learn more about hiring international teams with Remote or contact us today for expert advice and guidance on global employment.