Question 1

What is the difference between IRS Form W-8BEN and Form W-9?

Accepted Answer

Form W-8BEN is submitted by Non-Resident Aliens (NRAs) to establish foreign status and claim Tax Treaty reduced withholding rates. Form W-9 is submitted by US Citizens, Green Card holders, and US Resident Aliens.

Question 2

Why do US brokerages request Form W-8BEN from foreign investors?

Accepted Answer

Under 26 U.S.C. 1441 and FATCA regulations, US financial institutions are required to withhold a default 30% tax on US-sourced income paid to foreign individuals unless a valid Form W-8BEN is on file claiming treaty relief.

Question 3

How long is a Form W-8BEN valid?

Accepted Answer

A Form W-8BEN remains valid starting from the date signed until the last day of the third succeeding calendar year (approximately 3 full years), unless a change in circumstances occurs.

Feature	Form W-8BEN	Form W-9
Target User	Non-Resident Aliens (NRAs)	US Citizens / Green Cards / Resident Aliens
Tax ID Required	Foreign Tax ID (or US ITIN)	US Social Security Number (SSN)
Validity Period	3 Calendar Years	Indefinite (until status change)
IRS Reporting	Form 1042-S Issued	Form 1099 Issued

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