W-8BEN-E for an Israeli Company: Ltd. vs Public Limited Company, the Real 1975 Article Numbers, and a Sample PDF
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.
Treaty articles and rates on this page are checked against the US-Israel Income Tax Convention signed November 20, 1975, as amended by the Protocol of May 30, 1980 and the Second Protocol of January 26, 1993 — last verified October 2026. The IRS PDF includes both protocols as an appendix. The 1975 body of Article 12 is not the operative dividend text.
AI-generated imageAn Israeli Ltd. invoices a US client for consulting or software work, and accounts payable asks for a W-8BEN-E before they pay. The mistake that shows up on almost every generic guide is the article number: business profits in this treaty are Article 8, not Article 7. Article 7 is income from real property. When the company claims the treaty, Line 14b certifies a Limitation on Benefits test under Article 25, not "No LOB article in treaty."
Work the company does in Israel is not US-source: there is no US withholding on it, and Part III (Lines 14a, 14b and 15) stays blank. The filled example further down shows the other case: a private Ltd. (Chevra Be'eravon Mugbal), Active NFFE, whose staff perform services on site in the United States with no US permanent establishment, claiming Article 8(1) at 0%. Line numbers follow the current IRS revision of October 2021. The guide also covers the 1980 dividend split, the 17.5% ordinary interest cap, and why Line 15 for a software license cites Article 14(1), not Article 14(2).
If you are not incorporated — an Osek Patur or Osek Murshe working under your own Teudat Zehut — you file Form W-8BEN, not this form: start the W-8BEN wizard. Work you do in Israel is not US-source, so Part II (Lines 9 and 10) stays blank. Pay for services you perform in the United States is claimed on Form 8233 under Article 16(1), not on Form W-8BEN. Independent personal services are Article 16, not Article 14. This page is for incorporated businesses.
Or skip the reading and start the W-8BEN-E wizard — guided questions, a suggested treaty article and rate, and a signature-ready PDF for $30.
Blank form or already filled in?
You can download the official blank form from the IRS and complete it yourself, or get the same file filled from your answers.
- Blank official W-8BEN-E (IRS, free): Download W-8BEN-E as a PDF directly from the IRS — for a private Ltd. or a Public Limited Company.
- Blank official W-8BEN (IRS, free): Download W-8BEN as a PDF directly from the IRS — for an Osek.
- 1975 Convention, with the 1980 and 1993 Protocols: Income Tax Treaty PDF on IRS.gov — Business Profits is Article 8, not Article 7. Both protocols are in the same PDF.
- IRS treaty documents page: Israel tax treaty documents.
- Already filled in (5–10 minutes): W-8BEN-E for Israeli companies ($30) or W-8BEN for an Osek ($5) — treaty article and rate suggested automatically, ready to sign as a PDF.
Which Israeli company type are you actually dealing with?
The Chapter 3 box depends on the legal form, not on revenue:
- Public Limited Company A publicly traded Israeli company is always a Corporation for US tax purposes. 26 CFR 301.7701-2(b)(8)(i) lists "Israel, Public Limited Company" as a per se corporation. There is no Form 8832 election.
- Private Ltd. A Chevra Be'eravon Mugbal is the usual startup and small-company form. It is not on the per se list. Members have limited liability, so it defaults to Corporation, but it can elect a different US classification on Form 8832.
- Osek Patur / Osek Murshe An individual registration, not a separate legal entity. The person files Form W-8BEN, not this form. Work done in Israel leaves Part II (Lines 9 and 10) blank. Pay for personal services performed in the United States is claimed under Article 16(1) on Form 8233. Equipment rent is different: Article 8(5) puts the rental of tangible personal (movable) property in industrial or commercial profits for any lessor, so an Osek who rents out equipment with no US activity cites Article 8(1) at 0% on Form W-8BEN.
- Shutafut A partnership (שותפות) is not a Corporation by default. Do not check Corporation only because the business has more than one owner.
A private Ltd. that has not filed Form 8832 checks Corporation on Line 4. A Public Limited Company checks Corporation too, and it cannot elect out.
Do not put a shareholder's Teudat Zehut on the company form. The company number (H.P. / Het Pei) is also 9 digits, so the length alone does not tell them apart.
Who actually needs to fill in W-8BEN-E?
Any Israeli Ltd. or Public Limited Company that receives payments from a US business and wants to document non-US status. Common situations:
- Consulting or software invoices A US client asks for the form before paying service fees. For work done in Israel the form only documents foreign status; Part III stays blank.
- Royalties or a software license The payer needs a treaty claim before applying 10% or 15% instead of 30%.
- A broker or platform Dividends, interest, or royalties from a US account.
What happens without a valid form?
Without a W-8BEN-E, a US payer withholds 30% of the gross amount of US-source income such as dividends, interest, royalties, and fees for services performed in the United States, even when the treaty would reduce that rate. Services performed in Israel are not US-source: there is no US withholding on them and Part III stays blank, although a payer may hold the invoice until a valid form is on file. Fees for services performed in the United States can be 0% under Article 8(1) when the company has no US permanent establishment. Ordinary interest is capped at 17.5%, not 0%. A software licence is a copyright royalty: Article 14(1), 10%. 15% applies to industrial royalties: patents, designs, models, plans, secret processes or formulae, trademarks, or other like property or rights.
The form stays with the US payer. It is not filed with the Israel Tax Authority or the IRS. Israeli tax on the same income is a separate question.
W-8BEN-E line by line: what an Israeli Ltd. actually enters
Official IRS line numbers for an operating private Ltd., Active NFFE. For services performed in Israel, the common case, Part III (Lines 14a, 14b and 15) stays blank. Lines 14a, 14b and 15 are filled only when the company claims the treaty: for royalties, dividends or interest from US sources, or for services performed in the United States with no US permanent establishment, as in the sample below. A Public Limited Company uses the same lines except that it cannot elect out of Corporation. An Osek does not use this form.
| Line | What you enter |
|---|---|
| Line 1 | The company's legal name, for example Carmel Ltd. |
| Line 2 | Country of incorporation: Israel. |
| Line 3 | Leave blank unless a disregarded entity is receiving the payment for its owner. |
| Line 4 | Corporation for a Public Limited Company (always) or a private Ltd. (the default, unless Form 8832 says otherwise). The hybrid follow-up is usually No. |
| Line 5 | Chapter 4 (FATCA) status. An operating company with no financial business is usually Active NFFE. |
| Line 6 | The registered office. The sample uses Rothschild Blvd 10, Tel Aviv, 6688313. |
| Line 7 | Only if the mailing address differs from Line 6. |
| Line 8 | Usually blank. A US TIN is required only in the cases the payer names. |
| Line 9a | Leave blank. A GIIN is for financial institutions. |
| Line 9b | The company's H.P. number (Het Pei), 9 digits, as the foreign TIN. Do not enter a shareholder's Teudat Zehut, even though that number is also 9 digits. |
| Line 9c | Not checked for a registered company that has an H.P. number. |
| Line 10 | Usually blank unless the payer asks for a reference number. |
| Part II (Lines 11–13) | Not completed for an ordinary Ltd. Part II is for disregarded entities and branches. |
| Line 14a | Only when the company claims the treaty: country of residence for treaty purposes, Israel. Services performed in Israel leave Part III (Lines 14a, 14b and 15) blank. |
| Line 14b | Only when the company claims the treaty: the Article 25 Limitation on Benefits test it meets. Article 25 exists (the 1993 Protocol replaced the old Investment or Holding Companies article). An operating Ltd. usually certifies Active trade or business under Article 25(3)(c): it is engaged in the active conduct of a trade or business in Israel (other than making or managing investments, unless these are banking or insurance activities of a bank or insurance company), and the US income is derived in connection with, or is incidental to, that trade or business. "No LOB article in treaty" is the wrong box. |
| Line 14c | Not normally checked. |
| Line 15 | Only when the company claims the treaty. For fees for services performed in the United States with no US permanent establishment: Article 8(1), 0%, Services. Services performed in Israel leave Part III (Lines 14a, 14b and 15) blank. For a software licence: Article 14(1), 10%, Royalties. Cite Article 14(1), not Article 14(2). Article 14(2) only defines the two royalty types. The wizard also asks the Article 19(1) box before it writes that line: a company that furnishes the personal services of others in the United States may fall outside Article 8. |
| Line 39 (Part XXV) | Check the Active NFFE certification if Line 5 is Active NFFE. |
| Part XXX | Signature, printed name, and date. The sample is signed by David Cohen. |
Line numbers match Rev. October 2021. If the IRS issues a new revision, follow the numbering on the PDF you sign.
The guided W-8BEN-E wizard fills these lines from your answers, including the article and rate on Line 15.
Public Limited Company, private Ltd., and an Osek are not the same box
The per se list names only the publicly traded form. A private Ltd. is still a Corporation by default, and an Osek is not a company at all.
| Point | What it means |
|---|---|
| Public Limited Company | Per se corporation under 26 CFR 301.7701-2(b)(8)(i). Check Corporation. Form 8832 cannot change that. |
| Private Ltd. | Not on the per se list. Limited liability means the default is still Corporation. A different US classification requires a filed Form 8832. |
| Osek Patur or Osek Murshe | Individual registration. File Form W-8BEN. Work done in Israel leaves Part II (Lines 9 and 10) blank. Pay for independent services performed in the United States is claimed under Article 16(1) on Form 8233, never under Article 8 or Article 14. |
| H.P. number vs Teudat Zehut | Both are 9 digits. Line 9b on this form is the company H.P. number. The individual's Teudat Zehut belongs on Form W-8BEN. |
Use the default that matches the company you actually registered, unless a Form 8832 election is already on file.
What a completed W-8BEN-E looks like for an Israeli Ltd.
An anonymised example: Carmel Ltd., a private limited company with staff in Tel Aviv, Active NFFE, whose staff perform services on site in the United States with no US permanent establishment, claiming Article 8(1) at 0% and certifying Active trade or business on Line 14b. Work done only in Israel would leave Part III (Lines 14a, 14b and 15) blank. This is the PDF the wizard produces from the same inputs.
For illustration only. The company name, address, signer, and H.P. number are fictional. Example: Carmel Ltd., Tel Aviv, H.P. number 123456789, Chapter 3 Corporation, FATCA Active NFFE, US-Israel treaty Article 8(1) (Business Profits) 0% for services performed in the United States with no US permanent establishment, Limitation on Benefits Active trade or business.
Treaty rates by income type
These rates come from the 1975 Convention plus the 1980 and 1993 Protocols. Do not copy a modern 7 / 10 / 11 / 12 map onto Israel. Services performed in Israel are not in this table: they are not US-source, and Part III stays blank.
| Income type | Article | Rate |
|---|---|---|
| Services / consulting performed in the United States (Business Profits, no US permanent establishment) | Article 8(1) | 0% |
| Equipment rental (tangible personal property; not a royalty). Article 8(5) makes it industrial or commercial profits | Article 8(1) | 0% only with no US activity and no US permanent establishment; substantial equipment or machinery kept in the United States for more than 6 months is one (Article 5(2)(j)) |
| Dividends, general rate (under 10% voting stock, or any holder who does not meet the reduced-rate tests) | Article 12(2)(a) | 25% |
| Dividends to a company that owned at least 10% of the outstanding voting stock during the part of the payer's taxable year before the payment and the whole of its prior taxable year (if any), where not more than 25% of the payer's gross income for that prior year (if any) is interest or dividends (other than interest from a banking, insurance or financing business and dividends or interest from subsidiaries at least 50% owned), paid from income of a period when the payer is not entitled to the approved-enterprise rate under the Encouragement of Capital Investments Law | Article 12(2)(b) | 12.5% |
| The same company dividends, from income of a period when the payer is entitled to the approved-enterprise rate | Article 12(2)(c) | 15% |
| Dividends from a US RIC, or from a US REIT to an individual holding less than 10% of it | Article 12(2)(a), as 12(3)(a) provides | 25%; any other REIT dividend gets no treaty rate (30%) |
| Interest, ordinary (not a bank, savings, or insurance loan) | Article 13(2) | 17.5% |
| Interest on a loan of whatever kind granted by a bank, savings institution, or insurance company or the like | Article 13(2) | 10% |
| Interest beneficially derived by a Contracting State or an instrumentality of it not subject to tax by that State on its income, or by a resident of that State on debt obligations guaranteed or insured by that State or an instrumentality of it | Article 13(3) | 0% |
| Copyright royalties, including a software licence, films, and other literary, artistic, or scientific works | Article 14(1) | 10% |
| Industrial royalties (patents, designs, models, plans, secret processes or formulae, trademarks, or other like property or rights) | Article 14(1) | 15% |
On Line 15, cite Article 14(1) for either royalty tier. Article 14(2)(a) and 14(2)(b) only define copyright/film royalties versus industrial royalties. Do not write Article 14(2) as the rate paragraph. A software licence is a copyright royalty: Article 14(1), 10%. Equipment rental is not Article 14: it is Article 8(1) at 0% only with no US activity and no US permanent establishment, and substantial equipment or machinery kept in the United States for more than 6 months is itself a permanent establishment. The 1980 Protocol limits 12.5% to income from a period when the payer is not entitled to the approved-enterprise rate, and sets 15% when it is; both need the 10% holding and the 25% gross-income test. A holder under 10% stays at 25% under 12(2)(a). Ordinary interest for a consulting company is 17.5%. The 10% rate is only for a loan granted by a bank, savings institution, or insurance company or the like. An excess inclusion with respect to a residual interest in a REMIC takes neither 13(2) nor 13(3) (Article 13(8)). Article 14-A is a branch tax on a company that already has a US permanent establishment (up to 12.5% on the dividend-equivalent amount and 5% on excess interest). Do not cite 14-A for a services invoice.
An Osek files Form W-8BEN, and Article 16 goes on Form 8233
Article 16 applies to an individual resident performing personal services in an independent capacity. The other country may tax that income only when the services are performed in that country and the individual is present there for 183 days or more in the taxable year. There is no fixed-base test and no permanent-establishment alternative inside Article 16. A remote Osek working from Israel has no US-source income: Part II (Lines 9 and 10) of Form W-8BEN stays blank, with no article and no rate. Pay for services an Osek performs in the United States is claimed under Article 16(1) on Form 8233, not on Form W-8BEN. Article 18, not Article 16, covers public entertainers, and only when gross receipts exceed 400 US dollars for each day the person is present to perform. A Ltd. does not cite Article 16. Article 14 is royalties.
A blog post, or the finished PDF?
Hebrew FATCA guides already explain NFFE classifications. They rarely print the 1975 article numbers, the 1980 approved-enterprise dividend row, or the difference between Article 14(1) and Article 14(2). The wizard asks those questions once and returns the PDF.
| Point | This page | A generic guide |
|---|---|---|
| Article numbers | Part III blank for services performed in Israel. Article 8 for services performed in the United States with no US permanent establishment. Article 14(1) for royalties. Article 16 for an Osek's US work, on Form 8233. | Often copies Article 7 / 12 / 14 from a modern treaty. |
| Line 14b | Only with a treaty claim: the Article 25 test, usually Active trade or business. | Sometimes says there is no LOB article. |
| Finished form | Sample PDF for Carmel Ltd., for services performed on site in the United States with no US permanent establishment (work done in Israel leaves Part III, Lines 14a, 14b and 15, blank), plus a wizard that fills yours. | A checklist you still have to type into the IRS PDF. |
Start the wizard and download the filled PDF.
Frequently asked questions about W-8BEN-E for Israeli companies
Direct answers for a Ltd. billing US clients or receiving US investment income.
Which article do I cite for consulting fees?
None for consulting done in Israel: those fees are not US-source, and Part III (Lines 14a, 14b and 15) stays blank. For consulting performed in the United States, Article 8(1) at 0% when the Ltd. has no permanent establishment there. Article 7 in this treaty is income from real property. Do not cite Article 7 for services.
I am an Osek, not a Ltd. Which form and which article?
Form W-8BEN. Work you do in Israel is not US-source, so Part II (Lines 9 and 10) stays blank, with no article. Pay for services you perform in the United States is claimed under Article 16(1) on Form 8233, not on Form W-8BEN; the United States may tax it only if you are present there 183 days or more in the taxable year. Do not cite Article 14 (that is royalties) or Article 8 (that is the company's business-profits article, and it excludes an individual's personal services).
What rate applies to a software license?
A software licence is a copyright royalty: Article 14(1), 10%. 15% applies to industrial royalties: patents, designs, models, plans, secret processes or formulae, trademarks, or other like property or rights. A copyright of a literary, artistic, or scientific work, including a film, is Article 14(1) at 10%. Article 14(2) defines those two categories. It is not the paragraph you write on Line 15.
Is equipment rental a royalty?
No. Article 8(5) treats rental of tangible personal (movable) property as industrial or commercial profits. Cite Article 8(1) at 0% only when the company has no US activity and no permanent establishment in the United States. Keeping substantial equipment or machinery in the United States for more than 6 months is itself a permanent establishment (Article 5(2)(j)). Do not cite Article 14.
What do I check on Line 14b?
Only when the company claims the treaty: the Article 25 test it meets. For an operating Ltd. that is usually Active trade or business, Article 25(3)(c) of the 1993 Protocol: the company actively conducts a trade or business in Israel (not making or managing investments, unless these are banking or insurance activities of a bank or insurance company), and the US income is derived in connection with, or is incidental to, that business. The 1975 Article 25 (Investment or Holding Companies) was replaced. "No LOB article in treaty" does not apply to Israel.
Why is the dividend rate 25%, not 12.5%?
12(2)(a) is 25% for a holder who does not meet the reduced-rate tests. The 1980 Protocol set 12.5% under 12(2)(b) only for a company that owned at least 10% of the outstanding voting stock during the part of the payer's taxable year before the payment and the whole of its prior taxable year (if any), where not more than 25% of the payer's gross income for that prior year (if any) is interest or dividends (other than interest from a banking, insurance or financing business and dividends or interest from subsidiaries at least 50% owned), and the dividend comes from a period when the payer is not entitled to the approved-enterprise rate under the Encouragement of Capital Investments Law. When the payer is, 12(2)(c) is 15%. A dividend from a US RIC is 25%; a dividend from a US REIT is 25% only for an individual holding less than 10% of it, otherwise 30% (Article 12(3)(a)).
Is ordinary interest 10%?
No. The ordinary cap in Article 13(2) is 17.5% of the gross amount. 10% applies only to interest from a loan of whatever kind granted by a bank, savings institution, or insurance company or the like. 0% under Article 13(3) is for interest beneficially derived by a Contracting State or an instrumentality of it not subject to tax by that State on its income, or by a resident of that State on debt obligations guaranteed or insured by that State or an instrumentality of it.
What is Article 14-A?
A branch tax added in 1993. It can apply to a company that has a permanent establishment in the other country, up to 12.5% on the dividend-equivalent amount and 5% on excess interest. It does not replace Article 14 royalties, and a company with no US permanent establishment does not cite it for service fees.
Public Limited Company or private Ltd. on Line 4?
Both check Corporation unless the private Ltd. has filed Form 8832. Only "Israel, Public Limited Company" is on the per se list. The private Ltd. is a Corporation by default because of limited liability.
H.P. number or Teudat Zehut on Line 9b?
The company's H.P. number. Both identifiers are 9 digits (the sample uses 123456789). The label on the company form is H.P. number, not the combined individual label.
Related guides
More on the form itself:
- Company form: W-8BEN-E wizard for a Ltd.
- Osek, not a company: W-8BEN wizard for an individual ($5)
- Chapter 3 status: Chapter 3 status guide
Common mistakes to avoid
- Citing Article 7 for services Article 7 is real property. Services performed in Israel leave Part III (Lines 14a, 14b and 15) blank. Article 8 is for services performed in the United States with no US permanent establishment.
- Citing Article 14 for an Osek Article 14 is royalties. Independent personal services are Article 16, claimed on Form 8233 for work performed in the United States.
- Writing Article 14(2) on Line 15 The rate cap is Article 14(1). Paragraph 14(2) only defines the two royalty types.
- Checking No LOB article Article 25 is a real Limitation on Benefits article. With a treaty claim, an operating Ltd. that actively conducts its business in Israel, with US income connected with or incidental to it, certifies Active trade or business.
- Using 12.5% for every dividend The general rate is 25%. 12.5% and 15% are for a company that meets the 10% holding and the 25% gross-income tests, and they depend on whether the payer is entitled to the approved-enterprise rate.
- Using 10% for ordinary interest 17.5% is the ordinary cap. 10% is the bank, savings, or insurance loan rate.
- Putting a Teudat Zehut on the company form Line 9b is the H.P. number. The digit count does not tell them apart.
A note on Israeli tax
This page is about US withholding. It does not determine how Israel taxes the same income. The Encouragement of Capital Investments Law matters on the form only because the 1980 Protocol uses "approved enterprise" status to choose between the 12.5% and 15% dividend rates.
Company tax, VAT, and whether a payer is an approved enterprise are questions for an Israeli accountant. The W-8BEN-E only tells the US payer which treaty rate to apply at source.
Ready to fill the form with the Israeli article numbers?
The wizard asks the same questions as this page and suggests the article and rate on Line 15.