Personal Finance

W-8BEN form and US expenses

  • Last Updated:
  • May 2nd, 2019 9:33 am
[OP]
Deal Addict
May 23, 2009
3311 posts
1893 upvotes
Mississauga

W-8BEN form and US expenses

I need some help understanding this form. My wife (resident and employed in Canada) did a business conference in Las Vegas. The Vendor paid for the flight and hotel as it was supposed to be all inclusive but there were minor expenses as explained below.
- Taxi to and from the airport in Toronto and Las Vegas
- Meals during the 4 day trip.

Anyway, the Vendor's vendor who arranged the conference is supposed to reimburse the expenses (receipts submitted) but have asked my wife to fill out a W-8BEN form from the IRS. Reading the link below it sounds like it classifies the fund as an income not reimbursement so how does it come into play when filing Canadian taxes next year?

https://www.freshbooks.com/blog/w-8ben-form-canada-tax
6 replies
Deal Addict
Apr 7, 2019
1108 posts
1327 upvotes
You will need to pay taxes in Canada for money you will get through W8BEN
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Deal Addict
Jul 3, 2017
3859 posts
2806 upvotes
The sole purpose of the W-8BEN form is for the U.S. entity paying you to keep on file to show why they didn't withhold tax on the payment to you. It simply asserts that you are a foreign person residing in another country that has a tax treaty with the U.S., i.e., Canada. There is no risk to providing this form.

As for the expense payment to you, if it is reimbursement for expenses incurred on behalf of the company, it is not a taxable benefit to you and does not need to be declared on your taxes. The company will claim that amount as a business expense on their taxes. If they were paying you for your services, that would be income, and you would declare it on your Canadian taxes as income.
[OP]
Deal Addict
May 23, 2009
3311 posts
1893 upvotes
Mississauga
Thanks that clarifies it alot.

The payment is not for services. It is just reimbursement for Taxi and meals which my wife paid with her personal credit card. The vendor should have pre-booked airport shuttles and had pre-paid meals at the hotel.
Jr. Member
Aug 19, 2016
165 posts
78 upvotes
Fill out the W8-BEN, it doesn't make any difference one way or another to CRA. CRA will tax you according to Canadian law, and you do not owe a return to IRS. W8-BEN has nothing to do with how the income is classified, it declares your tax status in the US--in this case, declaring to IRS that you do not have any tax status in the US.

If you open a bank account in the US they will make you fill one out as well. It's a common form and you can fill it out and forget about it.
Deal Fanatic
Oct 18, 2004
5137 posts
1632 upvotes
Wat
So the W8-BEN is for them to not withhold any US taxes, but they will let CRA know of this and to expect foreign income?
Deal Addict
Jul 3, 2017
3859 posts
2806 upvotes
Wiseman wrote: So the W8-BEN is for them to not withhold any US taxes, but they will let CRA know of this and to expect foreign income?
You don't send the form to the IRS, you send it to the organization paying you, and I'm pretty sure they just file it and don't send it to anyone either. It's only for reference to show that they received the proper declaration from you. You are supposed to put your Canadian tax ID on it (SIN for individuals, business number for companies), but U.S. organizations don't even know how to parse such a number to verify that it's valid. I doubt anything ever goes to the CRA.

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