W-8BEN-E for an Icelandic ehf. (and W-8BEN for a Sole Proprietor): US–Iceland Treaty Guide (2026)
This article was created with AI assistance and has not been reviewed by a human editor. It is provided for general informational purposes only and does not constitute tax, legal, or financial advice.
Last checked: 29.09.2026 against the 2007 US–Iceland convention on home.treasury.gov (Treaty-Iceland-10-22-2007.pdf). Signed at Washington on October 23, 2007, in force December 15, 2008, withholding from January 1, 2009. The IRS file irs.gov/pub/irs-trty/iceland.pdf is the superseded 1975 convention. This page follows the 2007 text.
AI-generated imageSearch results, and the PDF linked from the IRS treaty page, still show the 1975 US–Iceland treaty. The treaty in force since 2008 has different article numbers: services are Article 7, royalties are Article 12, and dividends are Article 10.
This guide is for an einkahlutafélag (ehf.) that invoices US clients, licenses software, or holds US stocks, and for an einstaklingsrekstur. It covers which form you file, why an hf. is per se, and which kennitala goes on the tax line. A sample PDF is included further down.
An einstaklingsrekstur is a person who carries on business under personal liability. That person files Form W-8BEN, not Form W-8BEN-E: start the W-8BEN wizard. The 2007 treaty has no independent personal services article. Article 3(1)(k) folds those services into business, so the person cites Article 7. Article 14 is Income from Employment.
If you prefer to skip the reading, start the W-8BEN-E wizard. For services of an ehf. with no US permanent establishment it cites Article 7 at 0%, and Line 14b is Ownership and base erosion when the Iceland-resident ownership test is met. A signature-ready PDF is $30. Form W-8BEN for a person is $5.
Blank form or already filled in?
You can download the official blank form from the IRS, or get the same file already filled in.
- Blank official W-8BEN-E (IRS, free): Download W-8BEN-E as a PDF directly from the IRS — for an ehf. or an hf.
- Blank official W-8BEN (IRS, free): Download W-8BEN as a PDF directly from the IRS — for an einstaklingsrekstur.
- Already filled in (5–10 minutes): W-8BEN-E for an Icelandic ehf. ($30) or W-8BEN for a sole proprietor ($5).
- The convention in force: 2007 US–Iceland Income Tax Treaty PDF on Treasury.gov — signed October 23, 2007. Services are Article 7.
- Do not use the 1975 PDF: irs-trty/iceland.pdf is the superseded 1975 convention. Its article numbers are not the ones on the form.
ehf., hf., sf., or a sole proprietor?
26 CFR 301.7701-2(b)(8)(i) lists Iceland, Hlutafelag. US classification does not follow the local abbreviation one-for-one:
- Hlutafélag (hf.): A public limited company. It is a per se corporation and it cannot file Form 8832. There is no ownership-change grandfather.
- Einkahlutafélag (ehf.): The usual private company, under its own statute. It defaults to Corporation. The IRS has not clarified whether Hlutafelag covers an ehf. Confirm with a tax advisor before filing Form 8832. A single-member ehf. is not disregarded by default.
- Sameignarfélag (sf.) or samlagsfélag (slf.): These default to Partnership.
- Einstaklingsrekstur: A person, not a company. That person files Form W-8BEN and cites Article 7 for independent services.
Chapter 3 still decides which form you file. Part III is where the article and the rate go. Line 14b for an operating ehf. owned by residents of Iceland is Ownership and base erosion under Article 21(2)(e). A US-resident owner does not count toward that test.
Article 21 and a foreign owner
Article 21(2)(e)(i) counts residents of Iceland who qualify under Article 21(2)(a), (b), (c)(i), or (d). On at least half the days of the year they must own at least 50% of each class. Each intermediate owner must be a resident of Iceland. A US-resident owner does not count. The base-erosion prong leaves out arm's-length payments for services or tangible property. A payment on a financial obligation to a bank in a third country is left out only when it is attributable to a permanent establishment of that bank in Iceland or in the United States. A payment to a bank that is itself a resident of Iceland or of the United States is left out even without a permanent establishment. A payment to a third-country bank with no such permanent establishment still counts.
Article 21(3) derivative benefits can apply when at least 95% of the vote and value is owned by seven or fewer equivalent beneficiaries in the EU, the EEA, a NAFTA country, or an EFTA state, and the base-erosion clause is met. Illustration only, not a conclusion for a named company: an ehf. owned 100% by a resident of Reykjavik meets the ownership test. An ehf. owned 100% by a resident of Norway does not meet that ownership test. Norway is an EFTA state, so derivative benefits may be available. The US–Norway dividend rate is 15%, so the not-higher-rate condition fails for Iceland's 5% dividend rate and can be met for a 0% software royalty. Confirm the item of income with a tax advisor.
Line 9b and Line 14b
Iceland uses one 10-digit kennitala for a person and for a company. Do not enter the VSK number.
| Line | What you enter |
|---|---|
| Line 9b of Form W-8BEN-E | The 10-digit kennitala, for example 5503101390. The day digits are the registration day plus 40. Weights 3, 2, 7, 6, 5, 4, 3, 2. 5503101390 passes. 4504013150 passes. Do not enter the VSK number. |
| Foreign TIN on Form W-8BEN | The person's 10-digit kennitala, for example 0101851229. 0101851229 passes. 1201743399 passes. 0101851228 fails. The company's kennitala does not replace the person's kennitala on Form W-8BEN. |
| Line 14b | Ownership and base erosion when residents of Iceland meet Article 21(2)(e). A US-resident owner does not count. Derivative benefits is a separate box, including an EFTA owner, and it is not the default. |
| Line 15 for services of an ehf. | Article 7, paragraph 1, 0%, when the ehf. has no permanent establishment in the United States. A construction project is a permanent establishment only after 12 months. Do not cite Article 14. |
Read the kennitala from the company register before Line 9b. The form stores the name in Latin letters A–Z, so Norðurljós ehf. is written Nordurljos ehf.
Sample: completed W-8BEN-E for an Icelandic ehf.
A filled example for a fictional ehf. in Reykjavik, Chapter 3 Corporation, Line 14b Ownership and base erosion, Line 15 Article 7 at 0%.
Sample only. Nordurljos ehf., Laugavegur 10, Reykjavik 101, Iceland, kennitala 5503101390, Chapter 3 Corporation, FATCA Active NFFE, Article 7 at 0%, Ownership and base erosion.
What happens to the income
Each row stands on its own. Do not move a rate onto the neighbouring row. Do not cite the 1975 article numbers.
| Income | Article | Rate and condition |
|---|---|---|
| Services of an ehf. | Article 7 | 0% — only if the ehf. has no permanent establishment in the US. A construction or installation project is a permanent establishment only after 12 months. Otherwise the United States may tax the profits attributable to that permanent establishment. |
| Services of a sole proprietor or freelancer | Article 7 | 0% — the same permanent-establishment condition as for an ehf. Article 14 is Income from Employment. Do not cite Article 14 for these services. |
| Software licence, copyright, patents, know-how | Article 12(1) | 0% — a copyright of a literary, artistic, scientific or other work, including computer software, plus patents and know-how. Only the arm's-length amount between related parties. |
| Trademark plus know-how under a franchise or rental agreement | Article 12(2)(a) | Up to 5% — a trademark and information concerning industrial, commercial or scientific experience, when they are provided with a rental or franchise agreement that includes the right to use the trademark. |
| Film or video for use in connection with television | Article 12(2)(b) | Up to 5% — a motion picture film or a work on film, videotape, or other means of reproduction for use in connection with television. |
| Equipment rental | Article 7 | 0% — only without a US permanent establishment. Equipment rental is not a royalty under Article 12. |
| Interest | Article 11 | 0% — taxable only in Iceland under Article 11(1). Up to 15% under Article 11(5)(a) when the interest is determined by receipts, sales, income, or profits, by other cash flow, by a change in the value of property of the debtor or a related person, or by a dividend, distribution, or similar payment of the debtor to a related person. A REMIC excess inclusion follows US law. |
| Dividends — company holding directly at least 10% of the share capital | Article 10(2)(a) | 5% — only when the beneficial owner is a company that holds directly at least 10% of the share capital. This rate does not apply to RIC or REIT dividends. An indirect holding does not qualify. |
| Dividends — all other cases | Article 10(2)(b) | 15% — when the company does not hold directly at least 10% of the share capital, and for an individual. RIC dividends are 15%. |
| REIT dividends | Article 10(3) | 15% only for an individual holding not more than 10% of the REIT, or a holder of not more than 5% of any class when the dividend is paid on a publicly traded class, or not more than 10% of a diversified REIT. Otherwise 30%. |
| Artists and athletes performing in the US | Article 16 | 0% if gross receipts from performances in the United States, including reimbursed expenses, do not exceed USD 20,000 in the tax year. Otherwise the United States may tax the income from activities exercised in the United States. |
Form W-8BEN-E cites the 2007 article numbers. An ehf. with no US permanent establishment writes Article 7, not an article number from the 1975 PDF.
Questions people ask before they sign
Short answers for an ehf. or a sole proprietor. A fund or a bank needs an accountant, not this page.
Why do some sites say Article 18 or 14 for freelancers?
Those numbers belong to the 1975 convention, which is the PDF at irs-trty/iceland.pdf. The treaty in force is the 2007 convention. A freelancer cites Article 7. Article 14 of the 2007 text is Income from Employment.
Is my ehf. a per se corporation?
The eCFR names Hlutafelag, which is an hf. An hf. is per se and cannot file Form 8832. An ehf. defaults to Corporation. The IRS has not clarified whether Hlutafelag covers an ehf. Confirm with a tax advisor before filing Form 8832.
YouTube or AdSense?
A copyright royalty for the content can be Article 12(1) at 0%. If the payer qualifies the same payment as a film or video for use in connection with television, Article 12(2)(b) is up to 5%. This page does not pick Google's qualification.
US dividends at 10% ownership?
Article 10(2)(a) is 5% when the company holds directly at least 10% of the share capital. An indirect 10% holding stays at 15% under Article 10(2)(b). RIC and REIT dividends do not get the 5% rate.
What to do next
- Fill out W-8BEN-E in the guided wizard: Start the W-8BEN-E wizard ($30). For an ehf. with no US permanent establishment it uses Article 7 at 0%.
- Are you a sole proprietor?: Use the W-8BEN wizard ($5) and cite Article 7.
Mistakes that get the form sent back
- Article numbers from 1975: irs-trty/iceland.pdf is not the treaty in force. Services are Article 7. Royalties are Article 12. Dividends are Article 10.
- Article 14 for a freelancer: Article 14 is Income from Employment. Independent services are Article 7.
- 0% on a trademark franchise: Article 12(2)(a) is up to 5% when know-how travels with a rental or franchise agreement that includes the trademark.
- 5% on an indirect dividend holding: Article 10(2)(a) requires a direct holding of at least 10% of the share capital.
- A US owner in the ownership test: Article 21(2)(e)(i) counts residents of Iceland. A US-resident owner does not count.