Form W-8BEN-E instructions and uses for global businesses: A complete guide

Fadila in Cairo is one of your best project managers. She’s reliable, sharp, and always delivers results. So when she calls asking why her latest invoice was cut by 30%, you want to help. A little digging surfaces the problem: your company provided her with the wrong W-8, and the invalid form triggered the maximum automatic withholding in your system. 

This kind of mix-up goes beyond frustrating. It can strain relationships with key providers and expose your business to penalties in the event of an audit. Understanding Form W-8BEN-E helps avoid sticky situations by applying the correct withholding rates, honoring tax treaties, and making timely payments. In this guide, we’ll walk through everything you need to know about completing and filing Form W-8BEN-E. 

What is the W-8 BEN-E form?

The W-8BEN-E is a U.S. tax form used by foreign entities to certify that they’re not U.S. taxpayers and, where eligible, claim tax treaty benefits on U.S.-sourced income. Put another way, it’s how foreign businesses explain to an American company, “We’re a foreign entity and you don’t need to withhold 30% of our payment for U.S. tax. Here’s why.”

Example: Acme Co. licenses a proprietary algorithm from Alara Metrics, a Turkish data analytics firm, for use in its U.S. operations. Before making the first payment, Acme requests a Form W-8BEN-E. Alara completes the form, certifying its foreign status and claiming a reduced 10% withholding rate under the U.S.-Turkey tax treaty. Acme reviews the form, applies the treaty rate instead of the default 30%, and keeps it on file. 

Unlike many other tax forms, this one doesn’t go to the IRS. The non-U.S. business submits it directly to the American payer or withholding agent, and it’s the U.S. company’s responsibility to review it and apply the correct withholding rate. That means if the form is missing, incomplete, or invalid, you’re on the hook, not the contractor. The IRS holds the payer responsible for underwithholding, even if the foreign entity dropped the ball. 

But when it’s handled correctly, the Form W-8BEN-E does exactly what it’s meant to: it helps you pay international contractors accurately, apply the right tax treatment, and stay compliant. 

Who needs to file Form W-8BEN-E?

Foreign entities, which include corporations, partnerships, nonprofits, and even trusts formed outside the U.S., need to file Form W-8BEN-E before receiving certain types of payment from a U.S. business.

The form tells the payer or withholding agent, i.e., your business, two important things: that the contractor isn’t a U.S. taxpayer and how to treat payments for withholding purposes.

Entities typically need to file when:

• They’re earning U.S.-sourced income. For example, let’s say Atelier Ndao SARL, a creative agency based in Senegal, receives royalty payments from an American brand that licenses its design work. The agency’s co-founder, Amari, submits a W-8BEN-E to claim reduced withholding on these payments under the U.S.-Senegal tax treaty.

• They’re the beneficial owner of the U.S.-sourced income, or acting on behalf of one. Minerva Capital GmbH, a German fund administrator, files the W-8BEN-E on behalf of a Frankfurt-based trust it oversees with holdings in the U.S. Minerva doesn’t own the trust’s U.S. income directly, but it acts on behalf of the beneficial owner and needs to certify the trust’s foreign status before the U.S. portfolio company can issue dividends.

• A U.S. company or withholding agent requests the form in order to release funds. Sofia leads operations for TechKavya LLP, a Mumbai-based software firm. Before a U.S. customer can pay for a licensing agreement, they need a Form W-8BEN-E from TechKavya for their records.

• A U.S.-based contractor invoices through a foreign entity. Lina, a Chilean national, lives in New York but works as a consultant through her Santiago-registered firm. Because the entity receiving payment is foreign, Lina still needs to file a Form W-8BEN-E.

When you’re working with remote contractors outside the U.S. this form is critical. Contractors and vendors need to provide a completed, accurate Form W-8BEN-E before your business issues the first payment. No form means no funds. It also needs to be renewed every three years, or sooner if the entity’s ownership, structure, or tax status changes.

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How do I complete and fill out form W-8BEN-E? 

Walking your foreign contractors and vendors through the entire process isn’t necessarily realistic, but it pays to understand what goes into completing the form in case your HR team needs to field questions about how to fill out W-8BEN-E. After all, it’s your business on the hook for incomplete or invalid forms. Bad information means backup withholding, possible audits, or late payments (and disgruntled contractors). Here’s what they need to get right.  

Step 1. Enter the name of the organization

This needs to be the legal name of the entity—not a trade name, brand, or abbreviation. If they’re registered as Société Innovative S.A.S. or Impresa Italia SRL, that full name goes here in Part I. If the name doesn’t match existing tax records, the form could be flagged or rejected, leaving your business liable for backup withholding.

Step 2. Specify the country of incorporation

No guessing here. If the company was formed in Brazil, it should say Brazil. If your contractor mistakenly lists the U.S., which can happen for digital nomads unfamiliar with how U.S. tax rules work, the form could raise red flags. Remember, the IRS uses this form to confirm the foreign status of payees and assess tax treaty eligibility.

Step 3. Select the entity type 

This is where a lot of foreign contractors get stuck. U.S. tax categories don’t always translate cleanly, and what counts as a partnership or a trust in the U.S. might not exist in their home country or could operate completely differently. The IRS still expects them to pick the closest fit, however, and leaving it blank is as good as stuffing the entire form in a drawer.

Step 4. Provide Chapter 4 status (FATCA classification)

Line 5 tricks up a lot of people, even Americans, because it’s based on FATCA, the U.S. law that requires foreign entities to report specific kinds of U.S.-based accounts. The IRS wants to know whether your contractor is a financial institution or something else, like an active NFFE or a passive NFFE, because it determines how much reporting and withholding apply. 

Step 5. Input the entity’s permanent residence and mailing address

Regardless of where the person completing the form lives or works, they’ll need to input the company address in Line 6. This is the registered address where the business receives official correspondence, not a mailing address or P.O. Box. It also can’t be a U.S. address, even if the contractor lives and works in the United States, though Line 7 does allow for a U.S. mailing address. 

Step 6. Complete Taxpayer Identification Number (TIN) sections

If your contractor or vendor wants to claim tax treaty benefits, they’ll likely need a U.S. tax identification number (TIN). In most cases, that’s an Employer Identification Number (EIN). Some treaties do allow you to apply reduced withholding without it, while others absolutely require one. The problem? If the contractor doesn’t include a TIN when the treaty says they need one, you’ll have to withhold at the full 30% rate. A foreign tax identification number can help, but it’s usually not a substitute.

Step 7. Claim tax treaty benefits

If there’s a tax treaty in place between the contractor’s home country and the U.S., the contractor needs to say so to claim tax benefits. That includes listing the treaty article and type of income, along with certifying that they meet any qualifying conditions. If they skip this section, you can’t apply a reduced withholding rate, even if they’re technically eligible. 

Step 8. Sign and date the certification section 

No signature, no valid W-8BEN-E form. It’s that simple. The form needs to be signed by someone authorized to act for the entity, typically a corporate officer, not the bookkeeper or payroll administrator. If this section is blank or ambiguous, don’t accept the form. It leaves you too exposed if something’s amiss with the information. 

Common mistakes to avoid when filling out Form W-8BEN-E

If you’re collecting W-8BEN and W-8BEN-E forms from contractors, catching errors early can save everyone compliance and financial headaches later. A single administrative error can delay payments, trigger backup tax withholding, or lead to questions in an audit. Here are a few things you might want to double-check or communicate to your payees before accepting a submission.

Incorrect entity classification

Contractors can sometimes misidentify their entity type, especially if they’re not familiar with the U.S. tax system. A foreign business might accidentally check a box that applies only to U.S. corporations or foreign financial institutions (FFIs) or skip required questions for non-financial foreign entities (NFFEs). The IRS uses entity type to determine which rules apply under Chapter 4 of the Internal Revenue Code, so if it’s wrong, the form might be rejected. Make sure your payees understand which category actually describes their business type. 

Using an individual form instead of the entity form

If you’re providing forms to your payees as part of the onboarding or payroll process, make sure you’re sending the correct version. Your graphic artist in Cairo who invoices through an Egyptian LLC needs the W-8BEN-E, even though she works alone. Your freelance marketing consultant in London, on the other hand, should receive the W-8BEN, even though he subcontracts some tasks to his assistant. 

Missing TIN or foreign tax ID number

Depending on the type of income and the claim tax benefits being requested, a U.S. TIN or foreign tax ID number may be required. As the withholding agent, you’ll generally have to apply the full 30% rate if this is missing, so it’s especially important if your contractor wants to claim a reduced rate under a tax treaty.

Not claiming applicable treaty benefits

If an entity is eligible for reduced withholding under a treaty but skips Part III of the form or doesn’t certify it properly, it could end up overpaying U.S. taxes. Worse, you may not be able to fix it for them retroactively. Encourage your payees to review the instructions for Form W-8BEN-E carefully or consult a tax advisor before submitting.

Submitting expired or incomplete forms 

W-8BEN-E forms expire every three years, and incomplete forms are considered totally invalid, regardless of when they’re submitted. That includes missing signatures, blank required fields, or outdated information like an old mailing address. Before accepting a form, give it a quick scan to confirm it’s both complete and current. This helps you stay compliant and avoid unwanted attention from the IRS.

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How to submit Form W-8BEN-E

If you’re paying a foreign contractor or company, you’re the one responsible for collecting their W-8BEN or W-8BEN-E form. This form tells you whether to apply full tax withholding or to reduce it based on a tax treaty. You’ll keep it on file in case the IRS ever asks as part of your payroll compliance, but you don’t need to submit it.

For the contractor, it’s simple. Individuals will fill out Form W-8BEN, while entities use W-8BEN-E. The completed form goes directly to the payer (that’s you) and allows your business to process payments without defaulting to 30% withholding.

Automate global compliance with Rippling

Handling Form W-8BEN-E correctly is more than just a tick on the compliance checklist, it’s a crucial piece of managing an international team—and making sure you pay your contractors efficiently and compliantly. Rippling’s contractor of record (COR) helps you mitigate contractor risk and simplifies admin work so you can hire contractors worry-free.

With Rippling, you can:

• Outsource contractor compliance: There’s no need to be an expert in classifying contractors. Rippling engages contractors on your behalf and takes on the compliance liability.

• Pay contractors efficiently: Get advanced tooling on payments and invoicing that minimize back-and-forth communication and free up your time.

• Manage all of your workforce in one place: Keep your contractors and employees in the same system, so you have one org chart, one set of reporting, and one place for invoicing.

What happens if I don't fill out W8BEN?

If you don’t fill out a W8BEN or submit the form correctly, you may end up paying more in taxes than you should. Without a current Form W-8BEN or W-8BEN-E on file, the payer will withhold taxes at the default rate of 30%, which may be higher than the rate negotiated under your country’s tax treaty. If you’re eligible for a tax treaty exemption, you’ll also lose eligibility. 

What is the difference between W8BENE and W8BEN? 

The difference between W8BEN and W8BENE is who should complete each form. The Form W-8BEN-E is for entities like corporations or partnerships, while the Form W-8BEN is for individuals. The forms also differ in complexity. The W-8BEN-E has more sections based on entity type, chapter status, and whether you’re a financial institution or an NFFE. Before filing, take a close look at the instructions to ensure you’re submitting the correct document. 

How often do I need to renew the W-8BEN-E form?

You need to renew the W-8BEN-E form every three years to maintain validity, and renewal is part of maintaining ongoing compliance with U.S. tax laws. This helps the payer ensure that your tax status and certification are up to date with the IRS. If you’re receiving payments from U.S. sources, the form must remain active if you want to claim tax withholding relief. Be sure to use the most current version of the tax form and confirm that your mailing address hasn’t changed. 

Do I need a U.S. TIN to submit the form?

No, you don’t always need a U.S. TIN number to submit the Form W8BENE, but in some cases, like claiming reduced withholding under a tax treaty, you do. The W-8BEN-E instructions clarify that, without a taxpayer identification number, the IRS may reject your claim. For full compliance, review the instructions for W8BEN and check whether your entity type and claimed tax status require a TIN. It all depends on your certification and the type of income involved.

What’s the difference between Form W-8 and Form W-9?

Form W-9 is for qualifying U.S. persons to provide their Taxpayer Identification Number, while Form W-8, is for foreign individuals or entities certifying non-U.S. status and claiming tax treaty benefits. Knowing the difference between Form W-9 vs. Form W-8 ensures proper tax withholding and compliance when making payments to domestic and foreign payees.