What Is Form W-8BEN, And Why Is It So Important?

Form W-8BEN is a tax document used to certify that the country of residence for tax purposes is not the United States. It is required because Canada and the United States have entered into an intergovernmental agreement under which Canadian financial institutions must provide this information.

The completed W-8BEN form confirms:
1) That you are not a resident of the United States;
2) That you own the income to which the form relates;
3) It is also used to take advantage of  a reduced rate of withholding tax by virtue of being a resident of a country which has a tax treaty with the United States.

Why do I have to complete the W-8BEN form?

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Washington – The Internal Revenue Service today warned of a new twist tied to an old scam aimed at international taxpayers and non-resident aliens. In this scam, criminals use a fake IRS Form W-8BEN to solicit detailed personal identification and bank account information from victims.

Here’s how the scam works. Criminals mail or fax a letter indicating that although individuals are exempt from withholding and reporting income tax, they need to authenticate their information by filling out a phony version of Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting. Recipients are requested to fax the information back. Read More