Does my Canadian corporation file W-8BEN-E or the individual form?
The entity version is for the entity. If the recipient of the US-source payment is a corporation, a partnership or a trust, that body certifies its own foreign status and makes its own treaty claim, and a director signing the individual version on the company's behalf does not meet the request. The individual version belongs to a human recipient. Where someone invoices through a company but is paid personally, look at who the payer's records show as the recipient, because that is the party the withholding agent has to document. Getting this wrong is usually discovered when the payer asks for the form a second time.
Do I send Form W-8BEN-E to the IRS or to my client?
To the payer. The certificate is a document the withholding agent holds in its own records to justify how much tax it withholds and what it reports. It is not a return, and there is no filing address for it. That has two practical consequences. The payer decides whether what you have given it is good enough, so a form that answers the treaty questions vaguely comes back to you rather than to a tax authority. And the certificate governs payments made after the payer holds a valid copy, so the date it actually arrives in the right inbox matters more than the date written on it.
Which treaty article do we enter on Form W-8BEN-E?
The one that covers the type of income being paid to an entity of your kind, not the one a similar company used and not the article for individuals. The entity form asks two questions the individual form never asks: which treaty article applies to this type of entity, and whether the entity satisfies the limitation-on-benefits test it is claiming under. Both are answered from your own facts, which means where the entity is resident, what it is treated as, who owns it and what the payment is for. Guessing at either is the most common defect a withholding agent rejects, and the rejection usually arrives after the first payment has already been withheld.
What does the limitation on benefits question actually ask?
Whether the entity is the kind of resident the treaty was written for, rather than a company placed in a treaty country so that payments can pass through it. The form makes you name the basis on which the entity qualifies, and the basis has to be true of the entity as it is actually owned and run. A blank answer, or a box ticked because it sounds close, is treated as an unsupported claim. We work through it in writing and keep the reasoning on file, because the question is asked again every time the certificate is renewed or the payer changes.
Why did our withholding agent reject the W-8BEN-E we sent?
In most cases because one of the entity-specific answers does not hold together. Common causes: the classification of the entity does not match the treaty article claimed; the limitation-on-benefits basis is blank or inconsistent with the ownership; the signatory is not shown as authorised to sign for the entity; or the name on the form is not the name the payer holds on its invoice records after a group reorganisation. Withholding agents carry their own exposure for getting this wrong, so they reject rather than interpret. Ask which element failed, correct that element, and re-send. A fresh form with the same defect comes straight back.
Does a foreign partnership or trust use Form W-8BEN-E?
Often, yes, since the entity version covers foreign corporations, partnerships and trusts receiving US-source payments. But there is a prior question for those two. If the body is receiving the payment on behalf of other people rather than for itself, the certificate that describes it is the intermediary one, and the owners behind it have to be documented as well. So the first thing to settle is not which box to tick but whether the entity is the beneficial owner of the payment or a conduit for someone else. Partnerships and trusts sit on that line more often than companies do.
What is withholding tax?
Tax the payer deducts and remits before you receive the money, so collection does not depend on the recipient filing. On cross-border payments — dividends, interest, royalties, rent, pensions, fees for services — it is charged at a statutory rate on the gross amount, which a treaty often reduces. Because it is computed on gross rather than net, the amount withheld frequently exceeds the real tax, and an elective return or refund claim recovers the difference. See withholding review.
What is TCS on foreign remittance?
Tax collected at source. When a resident individual remits money abroad under the Liberalised Remittance Scheme — or buys an overseas tour package — the bank or seller collects an amount of tax on top and deposits it against your PAN. It is not a cost and it is not a final tax: it appears in your annual tax statement and is set off against the tax on your return, with the excess refunded. The rates and the purposes they attach to have been amended repeatedly, so we confirm them for the remittance year. See LRS limits and TCS.
