W-9 vs W-8BEN for Canadians: Which Form to Give
Why a Canadian resident gives W-8BEN, not W-9 — how it claims treaty rates, W-8BEN-E for companies, and the U.S. citizen in Canada who gives W-9 after all
Reviewed by the Fairlight Accounting cross-border tax team — U.S. & Canadian Tax Desks
A Canadian resident who is not a U.S. person gives a U.S. payer Form W-8BEN, not Form W-9. W-9 is for U.S. persons — citizens, green card holders, U.S. residents, and U.S. entities — and certifies a U.S. taxpayer number. W-8BEN certifies foreign status and claims the treaty's reduced withholding rates; W-8BEN-E does the same for a Canadian corporation.
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Which form, for whom?
| Recipient | Form | What it does |
|---|---|---|
| Canadian citizen and resident, not a U.S. citizen or green card holder | W-8BEN | Certifies non-U.S. status; claims treaty rates (Part II) |
| Canadian corporation, trust, or partnership | W-8BEN-E (corporations and complex trusts) or W-8IMY (partnerships, simple and grantor trusts, and other intermediaries) | Certifies foreign entity status and its treaty eligibility |
| U.S. citizen living in Canada | W-9 | Certifies U.S. person status and social security number; income reported to the IRS on a 1099 |
| Green card holder living in Canada | W-9 | Still a U.S. person for tax purposes |
| Dual citizen (Canada and United States) | W-9 | U.S. citizenship controls |
| Canadian with a U.S. LLC or U.S. corporation | A U.S. corporation or multi-member LLC gives W-9; a single-member LLC is disregarded, so its Canadian owner gives W-8BEN | — |
| Canadian performing services in the United States | Form 8233 (with an ITIN) to claim the treaty exemption for services performed in the United States; otherwise 30 percent withholding applies | Different form for compensation |
The payer's obligation is to withhold 30 percent on U.S.-source fixed or determinable income paid to a foreign person unless a valid W-8 claims a lower treaty rate, and to backup-withhold 24 percent on payments to a U.S. person who provides no W-9. A Canadian who gives no form is usually presumed to be a U.S. person — 24 percent backup withholding and a 1099 — or, where the payer has a foreign address or other foreign indicia on file, treated as foreign with 30 percent withheld; either way, the excess comes back only by filing a U.S. return.
What does W-8BEN claim?
Part I identifies the individual — name, country of citizenship, permanent address in Canada (not a P.O. box, not a U.S. address), and a foreign tax identifying number (the social insurance number) or a U.S. ITIN if one exists. Part II claims treaty benefits: the country (Canada), and, where the payment type needs a specific rate, the treaty article and the rate claimed — 15 percent on dividends (Article X), 0 percent on most interest (Article XI), 0 or 10 percent on royalties (Article XII), 15 percent on periodic pensions (Article XVIII). Part III is the signature and certification. The form is valid from the date signed through the end of the third following calendar year, or until a change in circumstances (a move, a change in citizenship). A Canadian holding U.S. stocks at a Canadian brokerage signs W-8BEN with the brokerage, which applies the 15 percent dividend rate across the account; a Canadian receiving U.S. royalties, U.S. rental income through an agent, or payments from a U.S. platform signs one with each payer.
What income does it cover — and not cover?
W-8BEN covers U.S.-source passive income paid to a non-resident alien: dividends, interest, royalties, rents, pensions, annuities, and similar "FDAP" income, and it also serves to document foreign status for a broker (which affects reporting, not just withholding). It does not exempt income effectively connected with a U.S. trade or business (a Canadian running a business in the United States files 1040-NR and gives W-8ECI), and it does not cover compensation for personal services performed in the United States, which uses Form 8233 for treaty exemptions (the Canada–U.S. treaty exempts an employee's pay if it does not exceed US$10,000 for the year, or if the employee is present fewer than 183 days in any twelve-month period and the pay is not borne by a U.S. employer or permanent establishment; self-employed services are business profits under Article VII, exempt unless there is a U.S. permanent establishment — including the 183-day services rule in Article V(9); the old Article XIV on independent personal services was repealed in 2008). A Canadian freelancer working remotely from Canada for a U.S. client earns foreign-source income (the services are performed in Canada) — no U.S. withholding applies at all, and the W-8BEN documents foreign status so the client knows not to issue a 1099 or withhold.
What about W-8BEN-E?
The entity version — eight pages, most irrelevant to a small Canadian corporation. The critical parts: the entity's name and country; its chapter 3 status (corporation); its FATCA (chapter 4) status — a Canadian operating company is usually an "active NFFE" (non-financial foreign entity with mostly active income); and the treaty claim in Part III, including the limitation-on-benefits certification (a Canadian corporation owned by Canadian residents generally qualifies as a "publicly traded" or "ownership and base erosion" test entity — the LOB box must be checked correctly or the treaty claim fails). A Canadian corporation receiving U.S. dividends, royalties, or interest gives W-8BEN-E to each payer; a Canadian corporation providing services to U.S. clients from Canada gives it to document foreign status.
Worked example
Three Canadians receive income from the same U.S. company. A Toronto software developer (Canadian citizen only) does contract work remotely from Toronto: she gives W-8BEN — the income is foreign-source (performed in Canada), no U.S. withholding, no 1099, and she reports it on her Canadian return. A Vancouver investor (Canadian citizen only) holds the company's stock at a Canadian brokerage: W-8BEN with the brokerage, 15 percent withheld on dividends under Article X, credited on his Canadian return. A dual citizen in Ottawa holds the same stock: she gives a W-9 — she is a U.S. person — no withholding, a 1099-DIV to the IRS, the dividends on both her U.S. and Canadian returns with the foreign tax credit sorting out the double tax. And a Calgary consultant who gave nothing when the company asked, with his Canadian address on file: 30 percent withheld on a US$20,000 royalty for a course he licensed to them, recoverable only by filing a 1040-NR with the treaty claim to get back the 20 points above the treaty's 10 percent — or zero, if the royalty qualifies for the copyright exemption.
Frequently asked questions
Do Canadians fill out a W-9 or a W-8BEN?
A Canadian resident who is not a U.S. citizen or green card holder gives W-8BEN. W-9 is only for U.S. persons — including U.S. citizens and green card holders living in Canada.
What does a Canadian put on W-8BEN for the treaty?
Canada as the country of residence in Part II, and, where the payer asks for a specific claim, the treaty article and rate for the income type — for example, Article X and 15 percent for dividends.
How long is a W-8BEN valid?
From the date signed through December 31 of the third following year, or until a change in circumstances such as a move or a change in citizenship.
What happens if I give no form?
Usually 24 percent backup withholding, because a payee with no form is generally presumed to be a U.S. person; if the payer has a foreign address or other foreign indicia on file, 30 percent. The excess is recoverable only by filing a U.S. return.
Official sources
The IRS states: “Give Form W-8 BEN to the withholding agent or payer if you are a foreign person and you are the beneficial owner of an amount subject to withholding. Submit Form W-8 BEN when requested by the withholding agent or payer whether or not you are claiming a reduced rate of, or exemption from, withholding.” — Internal Revenue Service, About Form W-8 BEN, https://www.irs.gov/forms-pubs/about-form-w-8-ben
Publication 597 states: “Treaty provisions are generally reciprocal (the same rules apply to both treaty countries). Therefore, Canadian residents who receive income from the United States may also refer to this publication to see if a treaty provision affects their U.S. tax liability.” — Internal Revenue Service, Publication 597, Information on the United States–Canada Income Tax Treaty, https://www.irs.gov/publications/p597
Next step
Fairlight Accounting is a cross-border accounting and tax practice with a U.S. Tax Desk and a Canadian Tax Desk. Our U.S. Tax Desk handles W-8BEN and W-8BEN-E preparation with treaty and limitation-on-benefits claims, Form 8233 for services in the United States, 1040-NR refund claims for over-withholding, and U.S. person determinations for dual citizens. See pricing or book a call.
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