How to fill out W-8BEN?

[ivorysnow]

Hi, I make music and the distributor for my songs requires me to fill out a w-8ben form. I have literally no idea how to fill it out, I’ve never filled out any tax forms like this before. Asked an accountant my mum knows and she had no clue either. If anyone can explain to me like I’m 5 years old how to fill this out I’d be really gratefull.

Also I'm a little confused on what filling it out even does, is it so that my earnings are reported to IRD or the US IRS?

 

[jon32]

@ivorysnow When I first had to fill out a W-8BEN I didn't really understand what it was for. Basically it is this:

1. There is a tax treaty between the US and NZ
2. In that tax treaty, location is the factor that determines your tax residency. If you work in NZ you are an NZ tax resident even if you are doing work for a US company
3. US companies are obligated to withhold tax on any income of a US tax resident.
4. The point of the W-8BEN form is to declare your treaty right as a tax resident of NZ to not have tax withheld as part of the payments to you from the US entity.
5. If whomever you are working for doesn't have this form for you (i.e. your declaration), they are obligated under the law to withhold tax

 

[chrislifted]

@jon32 The really important bit is that your US tax obligation is determined by your location, where you perform the service. It is not the location of the US company. Many US companies have no clue how that works because it is out of the box for them. I had quite a few argue the opposite, which would obviously result in tax witholdings.

 

[thomascech]

@chrislifted Hang on. Isn’t the idea that the US withhold 15% due to the treaty. THEN, when you put a NZ return in, and the IR3 form asks if you already paid withholding tax in the source country, that amount comes off your local tax bill?

 

[mariannia]

@ivorysnow

Also I'm a little confused on what filling it out even does, is it so that my earnings are reported to IRD or the US IRS?

Goes to the IRS.

Flip over the W8-BEN or scroll down to see guidelines on filling it in.

 

[matt67]

@ivorysnow Foreign tax identifying number
Use IRD#.

Under special rates and conditions

Write, "12. Royalties"
Above to claim a "5%" rate

Rest is easy.

 

[shalom7]

@ivorysnow Hi.

Have you seen an W-8ben form. It's literally pretty self explanatory on what information is needed. You really don't need an accountant lol.

It's a form used whenever earnings is derived from USA.

 

[cbeaudry]

@ivorysnow Make sure you keep a copy somewhere safe, especially for the tax treaty information - section numbers and rates etc. as I believe you’re required to submit a new one every 3 years.

Sometimes they’ll require an extra non-IRS form if it’s for an institution such as a bank etc. for example to explain why you might have a US mailing address or phone number and how they’re connected to you.

 

[underwoodfan2010]

@ivorysnow This relates to GME, but instructions are the same -

https://www.drsgme.org/fill-out-w8-ben-form