Joined: 16 Apr 12
25 Apr 12 4:23 am
The W8BEN is a form that US buyers should have in order to make full payment for you. This form serves as "proof" to the IRS, which does not require you to pay any income tax to them. If your buyer does not have this IRS form and they withhold a portion of your payment and remit this to the IRS, then you have to reimburse this payment to the IRS at the end of the year.
For starters, this seemed to be complicated and scary. But all you have to do is to fill out the W8BEN once and if you have other clients in the US, you may submit the same form to them. In case you get audited and your US client do not have the W8BEN on file, the IRS may impose penalty to your client and not to you.
As for as I know with US clients and companies, if you are going to do business with them, you may have to comply with their cross-border laws. If you feel uncomfortable giving them your signature or any kind of information, it is advised that you just don't do business with them.
I hope that helps.