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What's a W-8BEN tax form and why do I need to submit one?
What's a W-8BEN tax form and why do I need to submit one?
Bryna avatar
Written by Bryna
Updated over a week ago

What's a W-8BEN tax form?

A W-8BEN is a tax form required by the US Internal Revenue Service (IRS) for foreign individuals to establish their foreign status for tax purposes in the United States.

Why do I need to submit a W-8BEN tax form?

We require you to submit a W-8BEN tax form, to:

  • Certify your foreign status for tax purposes; and

  • Determine the withholding tax rate that applies to your US source income (such as dividend payments).

The form will be filled and filed on your behalf by our brokerage provider when you open a US Investing account with us.

The form must be updated and resubmitted every three years. Additionally, if you change your residential address or tax residency details, you'll need to submit a new form.

We're unable to accept W-8BEN forms filed with other brokers.

What are the potential benefits of a W-8BEN tax form?

The W-8BEN form can allow foreign investors to claim concessional tax treaty benefits, including a reduced rate of withholding tax, as per this table:

With a valid W-8BEN form

Without a valid W-8BEN form

Sell order

0% tax on sale proceeds

30% tax on sale proceeds

Dividend payment

15% tax

30% tax

Example: Let's say you buy A$500 worth of Apple shares and then sell the shares for A$1,000. If you have a valid W-8BEN and are eligible for treaty benefits, you should receive the full $1,000. If you don't have a valid W-8BEN form, 30% of the proceeds ($300) will need to be withheld and remitted to the IRS, so you'd only receive $700. (This example doesn't account for fees or transaction costs, nor does it account for any other tax implications that may apply to your personal circumstances.)

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