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Forms W-8 (Series) and W-9

IRS Tax Forms in the W-8 Series (W-8BEN, W-8ECI, W-8IMY, W-8EXP)

 

International vendors must submit a US withholding certificate (W-8 series of forms) with an Employer Identification Number (EIN or EIN), Individual Taxpayer Identification Number (ITIN) or Social Security Number (SSN) in order to claim an exemption from or reduction in withholding. With regards to business payments, the EIN, ITIN or SSN can only be used by the vendor for US business tax obligations and cannot be used for US personal tax obligations.

The specific W-8 form used by the international vendor, depends on the type of payment being paid and the status of the business itself.

  • W-8BEN : The payment is exempt from US tax under a tax treaty and the owner has an EIN, ITIN or SSN.

The W-8BEN is used to confirm that a vendor is a foreign entity and must be provided even if the vendor is not claiming a tax treaty reduction or exemption from withholding. Therefore, all foreign vendors must provide a W-8BEN even if no EIN, ITIN or SSN exists, unless another W-8 series form is provided. A valid W-8BEN must be provided before payment is issued by Vanderbilt.

A W-8BEN that doesn't have an ITIN, EIN or SSN is valid for three calendar years from the date it is signed unless a change in circumstances makes any of the information on the form incorrect. For example, a W-8BEN signed on September 1, 2011, without an ITIN, EIN or SSN remains valid through December 31, 2013. (Calendar Year #1 is 2011; Calendar Year #2 is 2012 and Calendar Year #3 is 2013).

A W-8BEN that does have an ITIN, EIN or SSN remains in effect until a change in circumstances makes any information on the form incorrect, provided that Vanderbilt issues at least one payment to the vendor per calendar year that is reportable on Form 1042-S. For example, an international vendor who submits a W-8BEN with a valid EIN and requests tax treaty benefits, will not have to re-submit the W-8BEN as long as Vanderbilt applies tax treaty benefits to at least one payment to the vendor each calendar year (and reports on Form 1042-S).

  • W-8ECI: The income is effectively connected with a a trade or business in the USA and the owner has an EIN, ITIN or SSN.

A valid W-8ECI must be provided before payment is issued by Vanderbilt.

  • W-8IMY (Withholding Foreign Partnership or Foreign Trust): The recipient of the income is a withholding foreign partnership or foreign trust that has provided a valid WIMY with a WP-EIN or WT-EIN.

W-8IMY (Qualified Intermediary Agreement) : The vendor has a qualified intermediary agreement with the IRS to accept primary responsibility for withholding.

A valid W-8IMY with a QI-EIN must be provided before payment is issued by Vanderbilt.

  • W-8EXP : The beneficial owner of the payment is a tax-exempt organization under US tax rules.

A valid W-8EXP must be provided before payment is issued by Vanderbilt.

International companies with a EIN beginning with "98" can only use this number on the W-8 forms listed above. if the EIN begins with any other numbers, the company must use a W-9 (see below).

Note, again that, the W-8BEN is also used to confirm that a vendor is a foreign entity and must be provided even if the vendor is not claiming a tax treaty reduction or exemption from withholding. Therefore, all foreign vendors must provide a W-8BEN, even if no EIN, ITIN, or SSN exists unless another unless another W-8 series form is provided.  Additional information on these forms and requirements can be found on the IRS website at http://www.irs.gov  

If the vendor (or beneficial owner of the compensation) is a nonresident alien for US tax purposes with an EIN, ITIN or SSN, who can claim a tax treaty benefit, income tax withholding can be avoided. A W-8BEN and Form 8233 are both usually required and ITO will provide these forms through the Business Visitor Questionnaire or International Supplier Questionnaire process. A new W-8BEN and Form 8233 have to be provided each calendar year the tax treaty is claimed.

IRS Tax Form W-9 and Form 8233 (Vendors Providing Personal Services Only)

If the vendor (or beneficial owner of the compensation) for personal services is a resident alien for US tax purposes with an EIN, ITIN or SSN and can claim a tax treaty benefit under a saving clause exception, a W-9 is required to claim tax exemption or withholding. A W-9 only has to be provided once. ITO will provide the forms after receiving a completed Business Visitor Questionnaire or International Supplier Questionnaire.

Saving Clause

Most tax treaties have a saving clause. A saving clause preserves or “saves” the right of each country to tax its own residents as if no tax treaty existed. Therefore, once an international person become a US resident or resident alien for tax purposes the tax treaty benefits can no longer be claimed. However, many tax treaties have an exception to the saving clause, which may allow an international person to continue to claim certain treaty benefits even after becoming a US resident or resident alien for tax purposes. Vanderbilt's online Business Visitor Questionnaire (BVQ) should be completed and submitted as soon as possible and can be submitted up to 30 days before services are provided in the USA.

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