If a U.S corporation sponsored/Charity to the any foundation or any organisation which is NGO's standards from their government standards..Which form they have to fill W-8EXP or W-8BEN..Please advise.

I am not quite sure what your question is just for reference, W-8BEN is used primarily by entities and individuals to claim foreign status or treaty benefits.It is a Certificate of Foreign Status of Beneficial Owner for US Tax Withholding. W-8BEN is just one of the many US tax forms used by taxpayers, and tax-exempt organizations, to report financial information to the IRS. On the basis of the income reported and classified on these forms taxes due to the government of the US are calculated. 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 US. 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.


W8exp is used to establish that you are not a U.S. person; Claim a reduced rate of, or exemption from withholding as a foreign government, international organization, foreign central bank of issue, foreign tax-exempt organization, foreign private foundation, or government of a U.S. possession.In general, payments to a foreign government (including a foreign central bank of issue wholly-owned by a foreign sovereign) from investments in the US in stocks, bonds, other domestic securities. financial instruments held in the execution of governmental financial or monetary policy, and interest on deposits in banks in the US are exempt from tax under section 892 and exempt from withholding under sections 1441 and 1442. In general, payments to an international organization from investment in the US in stocks, bonds and other domestic securities, interest on deposits in banks in the US, and payments from any other source within the US are exempt from tax under section 892 and exempt from withholding under sections 1441 and 1442.i guess you can talk to an intl tax representative t the irs for more info indetail.

1441 NRA Withholding 30%

Thank you very much for your advice on this. Let me explain very clearly, I work in U.S Incorporated Company. My responsibilities is to get obtain valid W-8 forms from our foreign vendors before I make payments to the foreign vendors. Here is my situation; a foreign vendor provides a software service to us (U.S Company) this service performed OUTSIDE OF U.S, now we have to make payment to that vendor. Before releasing payment, I had requested for appropriate W-8 form which ties to their entity. However, they sent W-8BEN Line 3 Checking as Tax exempt Organization, since their organization is education institution (Non-profit organization).

I’m not sure W-8BEN is the appropriate form for the Tax exempt organization.
My understanding is – if any charity, foundation, institution organizations is a tax exempt organizations should provide W-8EXP checking line 3 as foreign tax exempt organization, checking PART II either 12a or 12b, (If they are described in section 501(c) ).
Note: Looks like their organization is not applicable under section 501c and don’t have IRS determination letter W-8EXP.

Since this software services which was performed out of U.S by NON-PROFIT ORGANIZATION. Please confirm which I received W-8BEN line 3 as tax exempt organization without EIN – is this valid W-8BEN form for services performed outside of U.S by NPO or need to withhold 30% on this payment because the services performed by Nonprofit organization due to invalid form?

If my interpretation is incorrect, please advise.

1441 NRA Withholding 30%

Thank you very much for your advice on this. Let me explain very clearly, I work in U.S Incorporated Company. My responsibilities is to get obtain valid W-8 forms from our foreign vendors before I make payment to the foreign vendors. Here is my situation; a foreign vendor provides a software service to us (U.S Company) this service performed OUTSIDE OF U.S, now we have to make payment to that vendor. Before releasing payment, I had requested for appropriate W-8 form which ties to their entity. However, they sent W-8BEN Line 3 Checking as Tax exempt Organization, since their organization is education institution (Non-profit organization).

I’m not sure W-8BEN is the appropriate form for the Tax exempt organization.
My understanding is – if any charity, foundation, institution organizations is a tax exempt organizations should provide W-8EXP checking line 3 as foreign tax exempt organization, checking PART II either 12a or 12b, (If they are described in section 501(c) ).

Note: Looks like their organization is not applicable under section 501c and don’t have IRS determination letter W-8EXP.

Since this software services which was performed out of U.S by NON-PROFIT ORGANIZATION. Please confirm which I received W-8BEN line 3 as tax exempt organization without EIN – is this valid W-8BEN form for services performed out of U.S by NPO or need to withhold 30% on this payment because the services performed by Nonprofit organization due to invalid form?

If my interpretation is incorrect, please advise.

#1;NOTE; Only entities that are tax-exempt under US code section 501 should check the “Tax-exempt organization” box. Such organizations should use Form W-8BEN only if they are claiming a reduced rate of withholding under an income tax treaty or some code exception other than section 501. They need to use Form W-8EXP if they are claiming an exemption from withholding under section 501. As mentioned previously, the vendor outside of the US doesn’t have to submit you a W8 form unless the work was performed in US /unless the vendor was physically presented in US. however, if he wants, then he can submit you W8 form a there is no penalty in submitting W8 form to you from overseas.

#2;>>I AS mentioned above.
Note: Looks like their organization is not applicable under section 501c and don’t have IRS determination letter W-8EXP. ==> I guess it depends. The “Tax-Exempt” exemption is quite limited. Even if a group has obtained tax-exempt status in their home country, they are not automatically qualified for this exemption. There are two ways to qualify:
The organization must apply for and receive from the IRS a determination letter that their organization qualifies for 501(c)(3) status (i.e., tax-exempt status in the U.S.); or The organization must obtain a letter from a U.S. attorney certifying that the group would qualify for 501(c)(3) status with the IRS if they applied. This can be quite costly – the U.S. attorney technically is required to review the same documentation that the IRS would review in making the determination of 501(c)(3) status – a time-consuming process

#3;As mentioned above. As said, you can contact an IRS international tax representative fir more info in detail.

I truly appreciate your explanations on this.This information really gives a clear picture.

Can you advise - Is there any option where we can contact the IRS representative to guide on the forms?

I guess you can visit the officl IRS website;Help with Tax Questions - International Taxpayers