W-8BEN vs. W-8BEN-E: What’s the Difference?
If you’re dealing with U.S. tax forms, you might be wondering, What is the difference between a W-8BEN and a W-8BEN-E? Although both forms serve a similar purpose—certifying foreign status for tax and FATCA purposes—W-8BENs are used by individuals whereas W-8BEN-Es are used by entities.
What is the W-8BEN Form?
The W-8BEN form, also known as the Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals), is used by non-U.S. individuals to confirm their non-U.S. status. This form allows individuals to claim tax treaty benefits and avoid excessive withholding taxes on U.S.-sourced income, such as dividends, royalties, and interest. It also certifies that they are non-U.S. so that they don’t get reported to the IRS for FATCA purposes
What is the W-8BEN-E Form?
On the other hand, the W-8BEN-E form is designed for non-U.S. entities, not individuals. Officially called the Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities), this form helps entities certify their non-U.S. status and claim tax treaty benefits. Additionally, it plays a crucial role in FATCA compliance, requiring entities to classify themselves under the appropriate Foreign Financial Institution (FFI) or Non-Financial Foreign Entity (NFFE) category.
Key Differences Between W-8BEN and W-8BEN-E
| Feature | W-8BEN (Individuals) | W-8BEN-E (Entities) |
| Who Files? | Foreign individuals | Foreign entities |
| Purpose | Certify foreign status and claim tax treaty benefits | Certify foreign entity status, claim tax benefits, and certify FATCA classification |
| FATCA Compliance? | Yes | Yes |
| Length | 1 page | Multiple pages (varies by entity type) |
Final Thoughts
Choosing the correct form is crucial to ensure proper tax treatment and compliance with IRS tax and FATCA regulations. However, determining the right FATCA classification can be complex. That’s where AEOIclassification.com comes in. AEOIclassification.com accurately classifies both U.S. and non-U.S. entities for FATCA purposes.