W9 form and W8 form: What are these?

W9 form

A W-9 form is an Internal Revenue Service (IRS) tax form that is used to confirm a person's name, address, and taxpayer identification number (TIN) or Social Security Number (SSN) for employment or other income-generating purposes. A W-9 form is also known as a Request for Taxpayer Identification Number and Certification form.

Why do you need this for?

Use Form W-9 to provide your correct Taxpayer Identification Number (TIN) or Social Security Number (SSN) to the person who is required to file an information return with the IRS to report, for example:

• Income paid to you;
• Real estate transactions;
• Mortgage interest you paid;
• Acquisition or abandonment of secured property; 
• Cancellation of debt;
• Contributions you made to an IRA.

You can find more information about the W-9 form on this link from Investopedia and the form can be found on the IRS website.

W8 form

W-8 forms are Internal Revenue Service (IRS) forms that foreign individuals and businesses must file to verify their country of residence for tax purposes, certifying that they qualify for a lower rate of tax withholding. Although the W-8 forms are issued by the IRS, they are submitted only to payers or withholding agents.

W-8 forms are filled out by foreign individuals or entities that lack U.S. citizenship or residency but have worked in the U.S. or earned income in the U.S.

Why do you need this for?

Foreign individuals are ordinarily subject to a tax rate of 30% on specific types of income they receive from U.S. payers, including:

• Interest;
• Dividends;
• Rents;
• Royalties;
• Premiums;
• Annuities;
• Compensation for services rendered.

The form also helps you claim a reduction or an exemption from the U.S. tax withholding if you reside in a country with which the United States has an income tax treaty and the income you received is subject to that treaty.

Foreign persons must provide Form W-8BEN to the withholding agent or payer if they are the beneficial owner of the income subject to the tax withholding. You must submit the form regardless of whether you are claiming a reduced withholding.

Individuals must submit the form to the payer or withholding agent prior to receiving income or credits from them. Failure to submit a Form W-8BEN could result in paying either the full 30% rate or the backup withholding rate under section 3406.

Further information can be found on this link from Investopedia and the form can be found on the IRS website.

Important to notice!

Some banks are requesting the clients to provide these forms (depending on your case) to comply with reporting requirements.

If you need help with these forms, please contact a tax advisor. Firstbase.io works with some partners that are able to assist you to comply with your company's tax requirements. You can also sign up for our online tax webinars here.