How To Fill W-8BEN Form For Malaysian

Posted by Kris | Sunday, July 31, 2011 | | 25 comments »



What is W-8BEN form?

You need to fill up this form if you have a trading/brokerage account in the US. If you don't fill this up, the super efficient IRS (Internal Revenue Services) will hunt you down like a dog... :P Just kidding, basically, if you don't fill this up, the IRS can hold up to 30% of your dividend, interest, royalty, etc. Basically , this rate is what the IRS can withhold for a foreign person. If you filled this up, you are excluded from this withholding provided you are a non-resident alien. US residents and permanent residents do not need to fill this form as they are always subject to taxes.

Non-resident alien - generally means person that is not staying for a US for a long duration and has permanent residency outside US.

Every 3 years you need to fill up and resubmit this W-8BEN form. It is either thru electronically or using the manual way to sending the form to the US. (I hate this method but Thankfully, the stamp fees have been paid by for)

Reading the W-8BEN FAQ spreadsheet can be confusing for 1st time as the language used is tax and accounting centric.

Here is a summary what to fill:

Part 1:

Line 1: Fill up your name according to your account. Note that US naming convention is "First Name , Last Name".

Line 2:  Leave it blank as you are filling it up as an individual

Line 3: Pick individual

Line 4: Your address where you claim to be resident and paying tax. Put your Malaysian address here.

Line 5: Fill it above if Line 4 is not your mailing address.

Line 6: Leave empty if you don't have social security number aka the identity card number for the US.

Line 7: Optional. Leave blank. No need to fill our LHDN info into it.

Line 8: Account number for your trading/brokerage account. I put down my name also to be more complete. The reason is that I have multiple US trading account hence they need to know which account that I am filling.

In theory , I believe that you only need to submit one W-8BEN for all your account you have since you are practically giving them the same duplicate info. But i think because the brokerage firms does not sync-up the W-8BEN forms between their rivals, hence the need to do multiple jobs.

Part II
Line 9a,b,c,d,e & Line 10 - Leave untick as Malaysia does not have a tax treaty with US. And the rest does not apply for a non-resident alien and individual account holders.

Part III
You don't need to tick this as you like the average foreign US stock buyer do not dabble in interest swaps aka "notional principal contract" (such a fancy name). Unless if you are a private hedge fund manager?? 

Part IV - Just sign your autograph at the bottom and affixed a date and THE END :)

SEND the W-8BEN to your US brokerage firms if manual posting is needed.


25 comments

  1. ChampDog // 5:42 PM  

    I remember I filled it once and now have never filled it before. Just electronically update it when required.

    There is an "update" button in the brokerage account. So, I just click on that when my W-8BEN is almost expired. :)

  2. Kris // 6:43 PM  

    So far, my brokerage accounts, all requires me to reenter the information manually again electronically. Or at least go through a few clicks.

    Certainly not a single push button :P Although i would greatly appreciate that.

  3. lieucf // 11:29 PM  

    Hi guys, mine still insists that the original hard copy is being mailed back to the brokerage. Each fill lasts 3 years right? What brokerage can submit the W-8BEN form electronically?

  4. Kris // 8:45 PM  

    Lieucf,

    Some insists hard copy. It depends on your brokerage. If they allow electronic, when the 3year expiry is near, they will surely prompt you to submit when you log into the internet trading account.

  5. Michael Tsen // 11:29 PM  

    30% of mine is not much so I have been volunteering assisting USA economy for the past 10 years since they need it more than me :D

  6. ChampDog // 10:56 PM  

    You sure about that?

  7. Kris // 11:02 PM  

    Michael,

    You should assist Malaysia by paying more taxes on our behalf, instead of finding way to planning ahead to minimize tax :P lol

  8. Anonymous // 7:05 PM  

    Hi, bumped into your website after a search on W8Ben forms for Malaysians. Could you help to confirm what is the % witholding tax rate that will be witheld by the stock brokerages? 30% or less? And how are we able to claim it back as we're non-resident.

    Appreciate the help.
    Lee

  9. Kris // 12:07 AM  

    It is 30% flat rate tax witholding. Did you filled in the W8BEN form when you opened up your brokerage account?

    Which brokerage are you using, if i may ask?

    KnowThyMoney

  10. Andreas // 2:17 PM  

    Cool. This was helpful. I always forget how to fill out the form and looked around to find useful information online. When I came across your easy explanation, wow, I was relieved.

  11. Kris // 11:38 AM  

    Thanks, Andreas.

    I always forget too since i need to fill it once every 3 years :P

    So this post is a good reminder for me.

  12. Anonymous // 4:49 PM  

    Thanks,
    I understand that the witholding tax on US dividends is 30% . What is rate of tax for Malaysians if they fill out the W-8BEN form?

  13. Kris // 2:24 PM  

    @Anonymous, if you are a Malaysian and filled up this form , there is NO dividend tax witholding :)

  14. Ewaine // 2:06 AM  

    Hello there,

    I was recently informed that I received a monetary award from a society in US. They actually required me to fill in this form and am glad to have found this blog for guidance.

    Would like to enquire regarding several matters

    1) Q8 = Am I able to give them a local Malaysian account number?

    2) The monetary award is actually a small scholarship for my education in Malaysia. How do I come about to filling in Q10? (As Malaysia has yet to have tax treaty with US.) Am rather confused on how to fill in part 2.

    Thank you for the help,
    -Anastasia-

  15. Kris // 10:08 AM  

    Hi Anastasia/Ewaine,

    Thanks for following my blog.

    Q8: Reference number: If there any, you need to give your US account number.(If there is where your scholarship money is deposited). This is what matters. But usually scholarship money will transferred into your local account?? or you are going to US soon?

    Q10: Just leave it blank as Malaysia does not have tax treaty with US. Furthermore, Q9 is also all blank unless you are doing business with US as a company. Individual share investing is not considered as "business trading".

    Hope it helps. And do follow me at Facebook/knowthymoney or Twitter.

    Rgds,
    KnowThyMoney

  16. Leo // 8:59 PM  

    Hi, I am interested in investing/trading in the US stock market. I would like to know how we internationally fund a US-based account such as Just2trade? Due to the fact that i do not have a bank account in US, the only option that we have is wire transfer?

    Anyone here have had an experience with funding a US-based account while living in Malaysia?

    Thank you!

  17. Kris // 1:08 PM  

    @Leo, please add me at my page

    http://www.facebook.com/pages/KnowThyMoney/200273066660911

    Lets discuss there so that more people can learn.

  18. Anonymous // 4:58 PM  

    Hi Kris,

    Are you 100% sure that as Malaysian we are exempted from paying the 30% tax?

    I trade US stock. According to my broker and from searching to external sites, we can only be exempted if a country has a tax treaty with USA. Malaysia does NOT have tax treaty with US.

    Here's a link from IRS itself (search for the word 'exemption')



    http://www.irs.gov/instructions/iw8ben/ch01.html#d0e187

    thanks
    Colin

  19. Kris // 5:54 PM  

    @Colin,
    IRS can hold up to 30% of your dividend, interest, royalty.

    Note: capital gain is a different animal from above :D

  20. Emma // 7:00 AM  

    Let's say I traded Futures contract and earn sum of the money. Is this profit is tax exempted as well? ( No backup withholding?)

    Thanks.

  21. Nick S // 10:06 PM  

    Does anyone else have any experience in trading US stocks in Malaysia? Similar to anonymous poster above, I also trade US shares in Malaysia, and my stockbroker withholds 30% tax from my dividends, even though i have completed the W8BEN form. Is there anybody who has completed the W8BEN form and was actually exempted from the 30% withholding tax for dividends? If so, which stockbroker do you use? Would be very interested to find out.

  22. Ki Chong // 10:44 PM  

    Hi Kris,

    I didn't know that my W8Ben expired last year. After expiration i had some trades and the proceeds were being taxed.

    I have submitted W8Ben to make it valid for another 3 years. But can i claim back the withheld taxes?

  23. Kris // 11:06 PM  

    @Ki Chong,

    I am not sure about this. You might need to ask the relevant US authorities.

  24. ChampDog // 7:14 AM  

    I think it can be done, my ex-colleague did that before in the past.

  25. Hidayat Farizi // 11:46 AM  

    Hi,

    Would you happen to know how to fill a W-8BEN-E form? I am trying to fill a form for an estate, which will be set up under a joint account under my mother and my name.

    Thanks