Q: I am not a US Citizen or permanent resident of the USA for federal tax purposes, how do I know if I need to complete a W-9 or a W-8?
A: W-9 forms are to be completed by US Citizens, permanent residents and resident aliens for federal tax purposes.
W-8 forms are to be completed by non-resident aliens for federal tax purposes.
Q: How do I know if I am a resident alien or a non-resident alien for federal tax purposes?
A: Federal tax status is determined by performing the substantial presence test. It is not based on your current address or if you have a US SSN or ITIN. If you are not sure of your federal tax status, please contact email@example.com for assistance.
Q: Which version of form W-8 do I need to complete?
A: W-8 BEN is used only for individuals.
W-8 BEN-E is for all other entities, unless form
W-8 ECI, W-8 EXP or W8-IMY are appropriate.
W-8 ECI is used when an entity has a US branch (not a subsidiary) and is engaged in a US trade or business thru a permanent establishment. The entity files a US tax return. To be valid the form should contain a foreign address, US address and US EIN.
If the US organization is a subsidiary, it is a US person for federal tax purposes and should complete a W-9.
W-8 EXP is used when the foreign entity is a governmental entity or not-for-profit organization claiming exemption from Chapter 3 withholding tax under a specific IRC provision.
W-8 IMY is used when the foreign entity is either an intermediary not acting for its own account or is a fiscally transparent entity—either for U.S. income tax purposes or for income tax purposes in its resident country, such as a foreign trust or foreign partnership. Additional forms are required for each beneficial owner based on their tax status.
Q: I already have an AU Vendor number, why am I being asked to complete a new W-8?
A: Unlike W-9 forms which do not expire, W-8 forms do. In general, W-8 forms are valid from the date signed until the last day of the third succeeding calendar year.
Q: If I provide all the services outside the USA do I still need to complete a W-8 form?
A: Yes, the W-8 form is used to claim foreign status. If all compensated services are being performed outside the USA, please indicate this during registration and complete the foreign source certification.
Q: What is Chapter 4 status (FACTA status) on the W-8 BEN-E?
A: FACTA status distinguishes foreign recipients between foreign financial institutions' (FFI's) and all other foreign entities, Non-financial foreign institutions (NFFE's).
For definitions of all FACTA status types, see http://www.irs.gov/pub/irs-pdf/iw8bene.pdf.
Most common Non-Financial Foreign Entity Structures:
An active NFFE (non-financial foreign entity) is a foreign entity that is not a financial institution whose gross income comes more than 50 percent from non-passive sources and more than 50 percent of its assets are held for the production of non-passive income. This will be the most common choice, i.e., a normal nonfinancial foreign operating company.
A publically traded NFFE is an NFFE that is traded on one or more established securities markets.
An excepted territory NFFE is an NFFE organized in a possession of the U.S.
A passive NFFE is a foreign entity that does not have substantial U.S. owners or has provided the names of the owners and does not meet any of the other NFFE categories.