IRS W-8 BEN form

The IRS W-8 BEN form is an United States Internal Revenue Service (IRS) reporting form that Canadian investors often are required to provide to their discount brokerage. The full designation W-8 BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals).

It is a tax document used to certify that your country of residence for tax purposes is outside of the United States. It is required because of an intergovernmental agreement between Canada and the U.S. which obligates Canadian Financial Institutions to provide this information. It allows Canadian investors to claim a reduced withholding tax rate on US investment income of a Canada/U.S. income tax treaty. It's a material benefit because the withholding tax is normally 30 per cent. With a current W-8 BEN in place, you may qualify for the reduced rate of 15 per cent tax on dividends, or zero tax on interest.

Generally, a Form W-8 BEN will remain valid for three calendar years. However, under certain conditions a Form W-8 BEN will remain in effect indefinitely absent a change of circumstances. There is some evidence that Canadian financial institutions have converted to an online "tick the box" format instead of filling out the full form and only require you to tick the box every three years.

This article is intended to provide an overview of the IRS' W-8 BEN form. The specific details of filling out this form are beyond the scope of this article and you should consult the IRS' website for complete details.