How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Robin D. Your Own Question

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7714
Experience:  15years with H & R Block. Divisional leader, Instructor
14155347
Type Your Tax Question Here...
Robin D. is online now
A new question is answered every 9 seconds

Hi I am a Thailand based IT services company. I recently

Customer Question

Hi

I am a Thailand based IT services company. I recently bid on a US company's project and own the deal. It is worth USD $30K ($24K software development + $6K travel, ODC).

We have no US branches and do not perform work in the US.

The company sent me a W-8BEN form and told me to fill that in. Is this leading to a 30% withholding? If I pay dual taxes, 30% each county, I will will land up paying 60% in taxes and only get 40%.

a) What options do I have?
b) Are there an tax treaties that will help me? How much?


Appreciate any help and guidance you may have for us. If not, I might have to cancel this project since paying 60% is just not worth it.

Thanks,

Nicky
Submitted: 1 year ago.
Category: Tax
Expert:  Megan C replied 1 year ago.
Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

Thank you for your question. As you are not a US company and are not performing work inside the US, you will not owe tax to the US. You should not have to fill out the form W-8BEN as your income is not beneficial to the United States. This form is not required unless you have ownership in a US Corporation or perform work inside the US.

You need to tell the company that you are not required to fill out the form, as you have no liability to the United States.

** Please take a moment to rate my response as "Excellent" so that I may be compensated for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site**

Customer: replied 1 year ago.

Hi,


 


I just got a response saying that they still need all of their non US vendors to fill a w8BEN regardless. I am guessing they mean they will not withhold any money, which is good.


 


If you don't mind please let me know what I should fill in for question in Part I.3, Part II and Part III. There are just 3 questions that are very cryptic to me.


 


http://www.irs.gov/pub/irs-pdf/fw8ben.pdf


 


Thanks very much.


 


Nicky.

Expert:  Megan C replied 1 year ago.
We cannot assist in the preparation of any tax forms, as we can only give you general information. That is against the terms of this site.

Thank you again for using JustAnswer.com

** Please take a moment to rate my response as "Excellent" so that I may be compensated for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site**

Customer: replied 1 year ago.

I'm sorry, I didn't realize that. Since I don't understand much of the US IRS laws, I was very concerned.


 


You had mentioned that "This form is not required unless you have ownership in a US Corporation or perform work inside the US". Could I just tell them that and tell them hence I I don't need to fill that form.


 


 


Appreciate your guidance.


 


Nicky.

Expert:  Megan C replied 1 year ago.
Nicky,

Yes, you can tell them that you have no tax liability to the United States, and therefore filling out the form is not required.

Im afraid that if you fill out the form, they will withhold the 30% from your check. You would get that money back, but you would have to file US tax returns, which is an unnecessary burden.

** Please take a moment to rate my response as "Excellent" so that I may be compensated for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site**

Expert:  Robin D. replied 1 year ago.

Hello I am a different expert her on Just Answer,

All existing foreign vendors should be required to submit the applicable Forms
W-8 as soon as possible. If a valid W-8 is not received, the Treasury Regulations contain presumption rules for withholding agents to apply in determining the status of payees for withholding purpose. (See FAQ section 5 regarding documentation requires and Treas. Reg. Sec. 1.1441-1(b) (3) concerning the presumption rules).

This means that if you do not give them the W8 then they are required to withhold.

Form W-8BEN should be used by the foreign vendor to certify that it has non-U.S. status. If a treaty claim is made by the vendor Part II of the W-8BEN must be completed to be eligible for the treaty benefits. If there is no treaty article to claim and you are just certifying that yo are non US resident then you do not need to complete the Part II.

 

In short you will not be having withholding if you fill out the W8 but they will withhold if you do not because they have to stay within the rules for them when they pay you. Filling out the form by you is the payer's proof that they did not have to withhold.

Customer: replied 1 year ago.

Thank you. This sounds more in line with what I am have been reading. Thank you, will keep you posted in a day on what the client says.


 


 

Expert:  Robin D. replied 1 year ago.

Thank you for getting back to me. It should be in keeping with what you have been reading because I believe you and I were both able to comprehend the purpose of the W8.

If you wish to wait and rate my assistance till you speak with the client that is fine. If you could look for Robin D when you rate I would appreciate it.

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
 
 
 
Chat Now With A Tax Professional
Robin D.
Robin D.
Tax Professional
7714 Satisfied Customers
15years with H & R Block. Divisional leader, Instructor