W8 Form completion for exporting to US

Question posted by Rob Turner, on behalf of PRM Marine in CV2

We have just rec’d our first order for American tow tractor axles from our customer in Atlanta - TUG.

TUG have asked us for our W8 form. I have looked on the interweb and its all very confusing.

Could someone assist me with what I need to do ?

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Hello Rob,
Can you please clarify your terms of sale?

This form is applicable if you are going to receive some 'benefit' i.e. money from the items once they are in US. This could be annual royalties or something like that.

Is your company US owned or registered?

Regards,
Susan

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Paul Hickey, on behalf of Mercator Cargo Systems Ltd in PO1.

Hi Rob, as per Susan's response please confirm your terms of sale. If you need assistance we are an experienced freight forwarding company in dealing with export to the US and we have reliable partners throughout the US - I would be happy to quote you for shipping if required. You can contact me on 02392 756575 or james@mercatorcargo.co.uk
Thanks and best of luck
James

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Rob Turner, on behalf of PRM Marine in CV2.

Hi - yes we are a UK owned and UK registered firm with no partners living in the US or anyone working in the US. Our terms of sale are Ex-works Coventry UK. We are simply selling batches of axles to a US registered and owned company on a 30day credit term.
Our customer insists we have to complete a W-8BEN form. The W-8 form seems to be all about Income Tax.

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Hello Rob,
On the contract that you describe the W-8BEN form is not required because you do not derive any beneficial income e.g. royalties etc. from the sale.

However, the W-8BEN also provides evidence to the US Tax Authorities (IRS) that the person listed is not a US citizen or registered company and is not therefore subject to the tax withholding rules. If your customer has a completed W-8BEN form that proves this then he is excused from reporting to the IRS about this transaction and does not have to withhold approx. 30% of the price he is due to pay you.

I would suggest that this is the reason your customer wants you to complete the W-8BEN form. Just complete the parts of the form that you can and leave the rest blank.

You mention that you trade on ex-works terms - technically this means you do not even have to provide an export invoice or take responsibility as the exporter of record. However, unless you are actually selling to a UK tax registered company then you will be taking legal responsibility as exporter of record and you no doubt will be producing the invoice that is used for export. You may even be arranging loading of the truck or delivery to a port or freight agent. I would suggest that you would be better to use the term FCA Coventry UK as this will probably match more closely what you are actually doing. I can give you further assistance on this if you would like to contact me (details below).

Regards,
Susan
enquiries@morley-consulting.co.uk
www.morley-consulting.co.uk

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Hello Rob - sourced the information below from website: www.w-8ben.com

Form W-8BEN is used to:
•Establish that you are not a U.S. person
•Claim that you are the beneficial owner of the income for which Form W-8BEN is being submitted
•Claim a reduced, or zero, withholding as a resident of a foreign country with which the United States has an income tax treaty.

In addition it can be used to claim exception from domestic information reporting and backup withholding for income that is not subject to foreign-person withholding. Income included in this definition:
•Broker proceeds
•Original issue discount (OID) of less than 183 days
•Interest on bank deposits
•Interest, dividends, rents, and royalties from a foreign source
•Gambling gains by a nonresident alien individual. Restricted to the games of blackjack, baccarat, craps, roulette, and big-6 wheel

Finally form W-8BEN can also be used to certify that income from a notional principal contract is not effectively connected with the conduct of a trade or business in the United States.

Thus, in summary the W-8BEN form is used by foreign individuals to certify their non-American status. The Internal Revenue Service issued the form, and individuals use it to establish that they are foreign, non-resident aliens or foreign nationals performing work outside the United States. The result of the filing is these individuals can claim tax treaty benefits such as a lower tax withholding from dividends paid by U.S. companies.

kind regards
Brigid Hodgkinson
International Trade Manager
Northamptonshire Chamber of Commerce

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HMRC Advisor, on behalf of HM Revenue & Customs in G67.

Information on the Customs requirements for exporting is given in HMRC Public Notice 275. All notices can be found on our website www.hmrc.gov.uk under Quick Links > Library > Official Statistics – Publications – Notices, Info Sheets & Other Reference Materials > Import, Export & International Trade. The Public Notices are in numerical order.

I would also suggest that you contact the American Customs Authorities to ascertain if there are any import restrictions on such items.

HM Revenue & Customs
Customs International Trade & Excise
www.hmrc.gov.uk/contactus

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