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: 7363
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

does a Canadian based business require filling out a US W8

Resolved Question:

does a Canadian based business require filling out a US W8 form to be paid by a US company?

We perform services for a US-based company with an office in Canada.
We provide the service for the Canada office but US office reports we have to complete a W8 tax form to get paid.

Is this correct? our accounting does not believe so and says:

...this is not a required form if we don't have a *physical presence in the US.
Just to make sure, he contacted the IRS.

He indicates the "US source income" mentioned in the W8 forms do not apply if you reside in a different country (such as Canada), to payments from US.
The requirement seems to be that you submit the form if you have an office in the US or own operating equipment there.
Otherwise you do not need to fill the forms and the money is not taxable.
In our case then, the US Government does not require a form, eventhough we are performing services for a US based company.

Essentially IRS say the W8 forms are for income we would earn if physically in US.
If providing Service from outside the US, we should not fill the W8 form.
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.

Robin D :

Hello and thank you for using Just Answer,
The US company needs the W8 to keep in their files so the IRS would be able to see that the US company paid a nonUS entity. The IRS has advised US companies that for newly used foreign vendors, a valid Form W-8 should be required before any payment is made to them to avoid application of the presumption rules or the need to obtain the documentation later.
This W8 does not imply that the foreign vendor has any US tax liability but just the opposite. It allows the US company to account for the payments and the reason why no tax was withheld. Form W-8BEN should be used by the foreign vendor to certify that it has non-U.S. status.
I believe the person that answered the phone call at the IRS for you was fixed on the Fixed or Determinable, Annual or Periodic (FDAP) sourcing rules. Then the sourcing rules.
The W-8BEN is used to confirm that a vendor is a foreign entity and must be provided even if the vendor is not claiming a tax treaty reduction or exemption from withholding. Therefore, all foreign vendors must provide a W-8BEN, even if no EIN, ITIN, or SSN exists. Your company would be assisting the paying US company in their need to account to the IRS for payments made.


Robin D :

I know it seems redundant but the IRS has been charged with making sure that in an international age for business transactions, the US businesses are keeping correct records of their expenses.

Customer: Thank you so much.
Customer: So even if we don't have a US tax number we just leave that field blank on the form?
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7363
Experience: 15years with H & R Block. Divisional leader, Instructor
Robin D. and 6 other Tax Specialists are ready to help you
Expert:  Lindie-mod replied 1 year ago.
Hi, I’m a moderator for this topic and I wonder whether you’re still waiting for an answer. If you are, please let me know and I will do my best to find another Professional to assist you right away. I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you. Thank you!

Lindie
Customer: replied 1 year ago.
Yes
Would like some clarification re: the form the answer refers to.
Thanks.

I wait for a reply from the expert

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.