[illustratorchilli]

I'm a uk illustrator working w US magazines and have to fill out a w8ben for my company. Before I simply filled in PartI and signed the bottom. Which seemed OK.

I have one client who insists I have to fill out part II and apply for a TIN. Or they'll withhold 30%.

Bearing in mind I'm filling this out for a UK Ltd company, any help as o which is the right way to complete the form?

ANY help Much appreciated!

[IntlTax]

The 30% withholding tax is generally imposed on payments from U.S. persons to foreign persons relating to U.S. source income. If your company is performing services and all of those services take place outside the U.S. then the income is foreign source income and no withholding is required.

The W-8BEN is intended to communicate information from the foreign person to the U.S. person so that the U.S. person is allowed to withhold at a rate less than 30%. There are many exceptions to the 30% withholding, depending on the type of income and the status of the recipient. The W-8BEN covers many of these exceptions.

In your case, if all of the services are performed outside the U.S. then a W-8BEN is not even required because it is not U.S. source income. However, your client doesn't necessarily know where your company is performing the services. Therefore, it is not unreasonable for them to ask for a W-8BEN.

In these circumstances, you would need to complete Part II of the form and obtain an EIN (Form SS-4). You would probably check boxes 9a, 9b, and 9c (depending on your circumstances). On line 10, assuming your company does not have a permanent establishment in the U.S. you would specify the article in the treaty (I think Article 5) relating to permanent establishments.

[illustratorchilli]

Thanks for that. It's sort of what I figured as I have no interests in the US the company is solely a UK entity. I think that's why I've only filled out Part I before and it's been OK, other clients simply don't need one.

Only thing different with this client is they don't have an 'Illustrator agreement' which usually stresses that I'm a "third party contracted...etc"

Would that make a difference?

Just seems odd that I need to do so much extra (for this one client) when it seems I don't really need to (all my other US clients).

[AtlantaTaxExpert]

The fact that you are a contractor should make no difference.