Free compliance tool

W-8BEN collection checklist for US companies

Paying a contractor outside the US? Find out which form to collect, what to check on it, and when to ask for a new one. Built for US founders and finance teams.

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Pick the form and work the checklist

Answer two questions, then tick off each step as you go.

Which form do you need?

Is your contractor an individual or a company?

Where does the contractor perform the work?

Form to collect

Form W-8BEN

A foreign individual certifies their foreign status on Form W-8BEN.

Foreign-source income

Services performed entirely outside the US are generally foreign-source income, generally not subject to US withholding and not reported on Form 1042-S. A valid W-8BEN also documents foreign status, so the payment is generally exempt from Form 1099 and backup withholding. Confirm the specifics with a tax professional.

Collection checklist

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1.Confirm the contractor is a foreign person (a US person gets a W-9 instead).2.Pick the right form: W-8BEN for a foreign individual, W-8BEN-E for a foreign company or entity.3.Request the form before the first payment. The contractor gives it to you, not the IRS, and you keep it on file.4.Verify the form is complete and consistent: legal name, country of citizenship, foreign residence address, date of birth, signature and date, plus TIN and treaty article in Part II if claiming treaty benefits.5.Determine where the work is performed. Work done entirely outside the US is generally foreign-source. Any work inside the US is US-source and may trigger 30% NRA withholding.6.File it and set a renewal reminder: valid through the last day of the third year after signing, and re-collect on any change in circumstances.

This is general information, not tax or legal advice

This checklist is a general guide for US companies and does not replace professional advice. Withholding and reporting outcomes turn on the facts of your situation. Confirm the specifics with a qualified tax professional before you pay.

The six steps, explained

Confirm the contractor is a foreign person

The W-8 family is for foreign people and entities. A US person, a citizen, green-card holder, or US resident, gives you Form W-9 instead, no matter where they live. Sort this first so you request the right paperwork.

Pick the right form

A foreign individual completes Form W-8BEN, the Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals). A foreign company or other entity completes Form W-8BEN-E, the entity version. Use the picker above to land on the right one.

Request the form before the first payment

Collect the form up front and keep it on file. It does not go to the IRS. The IRS instructions are direct: "Do not send Form W-8BEN to the IRS. Instead, give it to the person who is requesting it from you." As the payer you keep it, and a withholding agent may rely on a properly completed Form W-8BEN.

Verify the form is complete and consistent

Check the legal name, country of citizenship, permanent residence address, date of birth, and the signature and date. To claim a tax treaty benefit, the contractor must give an identification number and the treaty details. Per the IRS instructions: "To claim certain treaty benefits, you must complete line 5 by submitting an SSN or ITIN, or line 6 by providing a foreign tax identification number (foreign TIN)," along with the treaty article and rate in Part II.

Determine where the work is performed

Source of personal service income follows where the work happens. The IRS source-of-income rule states: "The place, where the personal services are performed, generally determines the source of the personal service income, regardless of where the contract was made, or the place of payment, or the residence of the payer." So work done entirely outside the US is generally foreign-source income, generally not subject to US withholding and not reported on Form 1042-S, and a valid W-8BEN also documents foreign status so the payment is generally exempt from Form 1099 and backup withholding. If some or all of the work is performed inside the US, that portion is US-source income that may be subject to 30% NRA withholding, possibly reduced by a tax treaty, with 1042 and 1042-S reporting. Get tax advice on the in-US portion.

File it and set a renewal reminder

A W-8BEN is valid from the date signed through the last day of the third succeeding calendar year, unless a change in circumstances makes any information on the form incorrect, per the IRS instructions. If circumstances change, the contractor must notify you within 30 days and submit a new form. Diarize the expiry date and re-collect.

Common questions

Do I file a contractor's W-8BEN with the IRS?+

No. The contractor gives Form W-8BEN to you, the payer, and you keep it on file. The IRS instructions say "Do not send Form W-8BEN to the IRS. Instead, give it to the person who is requesting it from you."

W-8BEN or W-8BEN-E, which one?+

A foreign individual completes Form W-8BEN. A foreign company or other entity completes Form W-8BEN-E.

How long is a W-8BEN valid?+

Generally from the date it is signed through the last day of the third succeeding calendar year, unless a change in circumstances makes the information incorrect, in which case a new form is required. See the IRS instructions.

Do I have to withhold US tax when I pay a foreign contractor?+

It depends on where the work is performed. Services performed entirely outside the US are generally foreign-source income and generally not subject to US withholding. Work performed inside the US is US-source and may be subject to 30% NRA withholding, possibly reduced by a treaty. See the IRS source-of-income rule and confirm with a tax professional.

What if my contractor is a US citizen living abroad?+

A US person, that is a citizen, green-card holder, or US resident, gives you Form W-9, not a W-8BEN, regardless of where they live.

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