What you need to know about form w-8ben in Canada

If your Canadian business or you personally earn income from the U.S., you may need to complete Form W-8BEN. It tells the IRS you're not a U.S. taxpayer and helps ensure the correct amount of tax is withheld. The form lets Canadians claim treaty benefits and avoid paying more U.S. tax than necessary on income such as dividends and royalties. Once your paperwork is sorted, tools like Wise make it simple to receive USD from U.S. clients quickly and with low, transparent fees.

We will cover in this guide

What is Form W8-BEN? W8BEN Canada – how it applies specifically to Canadians The different types of W8 forms What qualifies as U.S. source income for Canadians? How to fill out Form W8-BEN as a Canadian resident Avoiding common mistakes on W8BEN Canada forms Submitting W8-BEN to U.S. payers W8BEN Canada – tax treaty between Canada and the U.S. How Canadian businesses can receive USD payments Using Wise for receiving USD from U.S. clients

What is Form W8-BEN?

Form W-8BEN is issued by the U.S. Internal Revenue Service (IRS) and confirms you're not a U.S. person for tax purposes.¹ It certifies your country of residence and allows you to claim any tax-treaty benefits that reduce or eliminate U.S. withholding tax on certain income (e.g., dividends, royalties, contractor payments). The form helps prevent the default 30% withholding rate² that applies to foreign payees.

There are two main versions:

• W-8BEN: for individuals who earn U.S.-source income but aren't U.S. citizens or residents.

• W-8BEN-E: for entities such as corporations, partnerships, or trusts that receive U.S.-source income.

Choosing the correct form helps avoid higher withholding, payment delays, or extra documentation requests.

W8BEN Canada – how it applies specifically to Canadians

For Canadian residents and businesses, the W-8BEN (or W-8BEN-E) lets you claim benefits under the Canada–U.S. tax treaty, which helps prevent double taxation. Certain U.S. income types qualify for reduced withholding — for example, dividends are often 15% ³ instead of 30%.²

Submitting the right form helps your U.S. payer/withholding agent apply treaty rates automatically. Renew every three years, or sooner if your details change.

The different types of W8 forms

The IRS issues several W-8 forms for different situations. All confirm the recipient of U.S.-source income is not a U.S. taxpayer and help apply the correct withholding. Using the right form helps prevent over-withholding and keeps you compliant.

Quick overview of five main types²:

• W-8BEN: for individuals receiving non-business U.S. income (e.g., dividends, royalties, rents, interest, premiums, services). Canadians use this to claim treaty rates instead of the default 30%.

• W-8BEN-E: for entities (corporations, partnerships, trusts) receiving U.S.-source income; also used to claim treaty benefits.

• W-8IMY: for intermediaries/flow-through entities receiving payments on behalf of others; includes withholding statements for beneficial owners.

• W-8ECI: for income effectively connected with a U.S. trade or business (taxed at graduated rates). Example: a Canadian contractor performing services in the U.S.

• W-8EXP: for foreign governments, central banks, foundations, or tax-exempt organizations claiming exemption or reduction.

What qualifies as U.S. source income for Canadians?

You need W-8BEN / W-8BEN-E only if you receive U.S.-source income — i.e., income paid by a U.S. entity or earned within the U.S. The income type determines whether the form applies and whether a reduced treaty rate is available.

Common US income types and whether W8-BEN applies

Type of Income	Does W8-BEN Apply?	Notes for Canadians
Dividends from US stock⁴	Yes	Use W-8BEN/W-8BEN-E to claim the 15% treaty rate instead of 30%. Applies to individuals and entities.
Royalties⁴	Yes	For IP (music, software, written works). Treaty often limits withholding to 10%.
Services/contractor fees	Yes	For Canadian freelancers/businesses providing services to a U.S. client.
Interest⁴	Sometimes	May be exempt under the treaty if payer isn't related. W-8BEN confirms eligibility.
Salary/wages	No	Income earned while physically working in the U.S. is subject to U.S. payroll tax. A different form (e.g., Form 8233) may be required.

How to fill out Form W8-BEN as a Canadian resident

Form W-8BEN confirms you're not a U.S. taxpayer and lets you claim the Canada–U.S. treaty rate. Complete it carefully and submit it to your payer/financial institution (not to the IRS).

Step 1: Identification of beneficial owner

• Name: your full legal name.

• Country of citizenship: "Canada." If you're a U.S. citizen/resident, you can't use this form.

• Permanent residence address: full home address (no P.O. boxes).

• Mailing address: complete only if different.

• U.S. TIN (SSN/ITIN): leave blank unless requested.

• Foreign TIN (FTIN): your Canadian tax ID. Use your SIN only if your bank/broker requests it.

• Reference number(s): your account/client number with the payer.

• Date of birth: MM-DD-YYYY.

Step 2: Claim of tax-treaty benefits

• Country of residence: "Canada."

• Treaty article (optional): include the relevant article (e.g., dividends or royalties) and the reduced rate (e.g., 15% for dividends; 10% for royalties).

Step 3: Certification

• Read carefully, then sign and date.

• Print your name below the signature.

• Submit to your U.S. payer/financial institution. Valid for three calendar years unless your details change.

If your business (corporation, partnership, trust) receives U.S. income, use Form W-8BEN-E.

Quick checklist:

• Part I: legal name, country of incorporation (Canada), entity type (e.g., corporation), FATCA status, address.

• Part II: confirm Canadian residency and eligibility for treaty benefits.

• Part III: authorized representative signs and dates.

Renew every three years or sooner if business information changes.

Avoiding common mistakes on W8BEN Canada forms

Wrong treaty article/rate: can trigger 30% withholding. Double-check the Canada–U.S. treaty or consult a tax adviser.

Forgetting to renew: W-8 forms expire after the third calendar year.⁵ Renew before expiry to avoid default withholding.

Mixing up forms: Individuals/sole proprietors use W-8BEN. Corporations/other entities use W-8BEN-E.

Submitting W8-BEN to U.S. payers

Don't send W-8 forms to the IRS. Submit them to the U.S. payer/withholding agent (company, platform, or financial institution) so they can apply the correct treaty rate.

Typical recipients include:

• U.S. businesses paying for services, royalties, or commissions

• Brokers/investment platforms handling dividends or interest

• Marketplaces/payment processors (e.g., PayPal, Upwork, Amazon)

Most large platforms accept digital uploads; some may request a scanned or paper copy. Check their preferred submission method.

How Canadian businesses handle the process

If your business earns regular U.S. income, keep a digital copy of your W-8BEN-E and track submission dates. Many Canadian businesses:

• Provide the form during onboarding with new clients/platforms
• Renew every three years to avoid excess withholding
• Keep a signed copy on file

Renewal requirements

W-8 forms remain valid until December 31 of the third calendar year after signing. A form signed in June 2025 expires December 31, 2028.

Submit a new form sooner if your name, address, entity type, or tax residency changes.

W8BEN Canada – tax treaty between Canada and the U.S.

The Canada–U.S. tax treaty helps prevent double taxation for individuals and businesses earning cross-border income. Submitting W-8BEN / W-8BEN-E lets U.S. payers withhold at a reduced treaty rate instead of the standard 30%.² The treaty outlines how dividends, royalties, and interest are taxed when paid from a U.S. source to a Canadian resident.

Sample treaty withholding rates (Canada–US)

Income Type	Standard IRS Rate	Canada–U.S. Treaty Rate
Dividends⁶ ⁷	30%	5% (if ownership is less than 10%) or 15% (in all other cases)
Royalties⁶ ⁷	30%	0%-10% (varies by royalty type)
Interest⁶ ⁷	30%	Up to 10%, often 0% for most arm's-length payments

Reduced rates apply only if you've submitted a valid W-8BEN or W-8BEN-E and confirmed Canadian tax residency. Without the form, U.S. payers must withhold 30%.² If U.S. income is frequent, review the treaty text (Department of Finance Canada) to confirm which articles apply.

How Canadian businesses can receive USD payments

Canadian businesses working with U.S. clients can receive USD via bank wires, international payment platforms, or online processors (e.g., PayPal, Stripe). These often involve conversion fees, intermediary bank charges, or unfavourable rates when converting USD to CAD. Banks may also hold funds during compliance checks. Wise offers a simpler way to receive and hold USD with transparent pricing.

With a Wise account you can have local account details in 10 currencies, including CAD, USD, and EUR — all in one place.

Using Wise for receiving USD from U.S. clients

With Wise Business, Canadian companies can get paid in USD with local account details (U.S. routing and account number), so clients can pay them like a domestic transfer.

Wise makes it simple to:

• Receive USD transfers for a fixed fee (e.g., 6.11 USD per wire/SWIFT)⁸
• Hold and convert 40+ currencies at the mid-market rate with no hidden markup
• Spend globally with the Wise Business debit card
• Integrate with tools like Xero, Stripe, Shopify

There's a one-time setup fee of 55 CAD⁸ to unlock international account details for receiving in 22 currencies (including USD, GBP, EUR). Once funds land, you can hold USD, convert to CAD, or make international payments.

Conclusion

Completing W-8BEN (or W-8BEN-E) correctly helps Canadian residents and businesses get the right tax treatment on U.S.-source income under the Canada–U.S. treaty.

Use W-8BEN if you're an individual/sole proprietor; use W-8BEN-E if your business is an entity (corporation, partnership, trust). The wrong form can cause delays or excess withholding.

After your form is accepted, Wise Business makes it easy to receive USD from U.S. clients — hold, convert, spend, or send at the mid-market rate with transparent fees, keeping cross-border payments simple and cost-effective.

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Sources:

1. About Form W-8 BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals) | Internal Revenue Service
2. W-8BEN: When to Use It and Other Types of W-8 Tax Forms
3. United States – Canada Income Tax Convention
4. Instructions for Form W-8BEN (Rev. October 2021)
5. Instructions for Form W-8BEN (10/2021) | Internal Revenue Service
6. Convention between Canada and the United States of America
7. US Canada tax treaty: expat filing guide and tips
8. Wise Business Fees & Pricing: Only Pay for What You Use
   Sources verified on 30 December 2025