Individual Taxpayer Identfcaton Number (ITIN) for US

[BlasterBates]

Actually, for what it's worth, this is not quite the same thing. The W-8BEN has been around for a long time. However, pre-FATCA, there was absolutely no requirement for a non-US person receiving foreign-source income (and, for the OP, the income would be classified as foreign-source) to report anything to the IRS. What you're referring to above is actually a requirement imposed by certain financial institutions (your share broker) on their customers (you). This is not a requirement imposed by the IRS directly. Notwithstanding the link I posted above about the new requirements in the context of FATCA, there is absolutely no need or basis for a non-US person to report to the IRS on their foreign-source income (noting that both of these are technical terms).

There's no obligation of course but you pay less tax. You can refuse to fill it in, but then you don't get your tax rebate.

You're basically informing the IRS that you are an alien and saving money.

[jamesbrown]

There's no obligation of course but you pay less tax. You can refuse to fill it in, but then you don't get your tax rebate.

You're basically informing the IRS that you are an alien and saving money.

Yes, I understand the situation with US equities purchased through a UK broker as I have purchased US equities in the past. However, there is no analogy here. Brokers impose certain conditions to maintain their status with the IRS and, IIRC, withhold at a 30% rate. In contrast, there is no withholding requirement on the money received by the OPs company from a US client if the work is done in the UK; it is "foreign-source" income received by a "non-US person". Further, alongside the absence of a withholding requirement, there was, until very recently, no reporting requirement. However, the OP may find that they are asked to complete the first few lines of the new W-8BEN-E by their US client, for which no ITIN or any other US reference would be required.

[darrenb]

I'm freelancing in Europe and I sometimes do work for US clients. I haven't had to fill out any US tax forms before, but my latest potential client seems a bit nervous, possibly because of FATCA and the ever-evolving regulatory environment.

I have a call with them tomorrow, and they might want me to walk things through with them a bit. Would appreciate any tips on how to soothe them, as I am a bit confused about it all myself. Especially would love to hear the experience of darmstadt who apparently had to deal with this last year, and from the wise jamesbrown!

It's occurred to me they may want me to fill out a W8-BEN. If so, should I be putting in an ITIN, a local tax ID, or asking for a different form entirely?

[jamesbrown]

I'm freelancing in Europe and I sometimes do work for US clients. I haven't had to fill out any US tax forms before, but my latest potential client seems a bit nervous, possibly because of FATCA and the ever-evolving regulatory environment.

I have a call with them tomorrow, and they might want me to walk things through with them a bit. Would appreciate any tips on how to soothe them, as I am a bit confused about it all myself. Especially would love to hear the experience of darmstadt who apparently had to deal with this last year, and from the wise jamesbrown!

It's occurred to me they may want me to fill out a W8-BEN. If so, should I be putting in an ITIN, a local tax ID, or asking for a different form entirely?

This is t'interweb (), so if you want completely accurate advice on complex issues, this is probably not the place. That being said, the advice below is consistent with the professional advice I've received in the past:

Payments to Foreign Contractor Entities: Form W-8BEN-E - International Tax Blog

I should warn you that I've also received incorrect advice from "well-qualified" cross-border tax professionals in the past so YMMV. Bottom line, you should be filling out the new W8-BEN-E on behalf of YourCo, not an old W8-BEN on behalf of you personally. Also, more than likely, the payments will not be withholdable payments, so it should be simple to complete, in line with the advice above. You should only need to do this if your client explicitly asks for it (because it's their responsibility).

[darrenb]

Bottom line, you should be filling out the new W8-BEN-E on behalf of YourCo, not an old W8-BEN on behalf of you personally.

Thanks, that link is great. But is this assuming I've been hanging on to my UK Ltd (I haven't) or am incorporated in Europe? I'm just a regular freelancer.

[jamesbrown]

Thanks, that link is great. But is this assuming I've been hanging on to my UK Ltd (I haven't) or am incorporated in Europe? I'm just a regular freelancer.

Yes, indeed, this was my assumption. However, the main difference is the form, and not the level of complexity, which is the same. In that case, you'll need to complete the old W-8BEN, not the new form (E), which is for entities rather than individuals. Again, it's very simple if you're intending to complete the services wholly in the UK (in which case this is not "US source" income) and you're not a "US person", because these payments will not, under those circumstances, be witholdable payments. Here's the relevant (older) information on that:

Form 1099 for Payments to Foreign Contractors for Services? - International Tax Blog

[darrenb]

Form 1099 for Payments to Foreign Contractors for Services? - International Tax Blog

Thanks, I'm still not sure if I should supply an ITIN or a local tax ID, or if the client would have the right to withhold based on the absence of one or the other. I would rather not share any tax information I don't have to.

[jamesbrown]

Thanks, I'm still not sure if I should supply an ITIN or a local tax ID, or if the client would have the right to withhold based on the absence of one or the other. I would rather not share any tax information I don't have to.

The advice in the link is that you don't need an ITIN, and that is consistent with the professional advice that I've received. The point of the form is that you're indicating, by your signature, that the payments are not withholdable payments, but it's up to your client to accept that declaration. Ultimately, it's their responsibility to retain the form (it is not sent to the IRS) and then evidence, upon request from the IRS, that the payments were not withholdable. If the client causes a fuss, there's little you can do, other than show them the professional advice you've received. I've personally never had a problem with my US clients once I've explained the position.