W-8BEN-E for a South African (Pty) Ltd: 0% on Services, Interest and Royalties — and the Right Line 14b Test
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–South Africa Income Tax Convention signed at Cape Town on 17 February 1997, generally effective 1 January 1998. There is no protocol. Last checked: 05.10.2026.
AI-generated imageA US client, marketplace or platform asked your (Pty) Ltd for Form W-8BEN-E. Under the US–South Africa treaty most small companies end up at 0% — if three lines are filled in correctly.
The convention was signed at Cape Town on 17 February 1997 and is generally effective from 1 January 1998. There is no protocol. The IRS text is the US–South Africa income tax treaty PDF. Last checked: 05.10.2026. Those three lines are the SARS income tax reference number on Line 9b, the limitation-on-benefits test on Line 14b, and the article, paragraph, and rate on Line 15.
A sole proprietor or freelancer uses the shorter Form W-8BEN, not this form: start the W-8BEN wizard. A (Pty) Ltd, a public company, an Inc., and a close corporation use Form W-8BEN-E.
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 already filled in by the wizard.
- Blank official W-8BEN-E (IRS, free): Download W-8BEN-E as a PDF directly from the IRS — for a (Pty) Ltd, a public company, an Inc., and a close corporation.
- Blank official W-8BEN (IRS, free): Download W-8BEN as a PDF directly from the IRS — for a sole proprietor or freelancer.
- US–South Africa treaty (IRS): Income tax treaty PDF on IRS.gov — signed at Cape Town on 17 February 1997, generally effective 1 January 1998, no protocol.
- Already filled in (5–10 minutes): W-8BEN-E for a South African company ($30) or W-8BEN for a sole proprietor or freelancer ($5) — treaty article and rate suggested from the convention, ready to sign as a PDF.
Which form does a South African business file?
The form follows the legal person who owns the income, not the marketplace that asked for a document.
- (Pty) Ltd, public company (Ltd), Inc., and close corporation (CC): Form W-8BEN-E. These are companies (or a close corporation) for this purpose.
- Sole proprietor and freelancer: Form W-8BEN. Independent services are Article 14, not Article 7.
- South African branch of a foreign company: The foreign parent is the person claiming the income. The parent files the form that matches the parent.
- US citizen or green-card holder in South Africa: Form W-9. A W-8 series form is for a person who is not a US person.
Chapter 3 on Line 4 is a separate question from which form you picked. The next section is that classification.
Who fills in Form W-8BEN-E?
A South African company that receives US-source payments and wants the treaty rate instead of 30% withholding.
- A US client: The (Pty) Ltd invoices a US business for services and the client asks for Form W-8BEN-E before paying.
- A marketplace or platform: Payouts from a US platform, including software, YouTube, or AdSense.
- US shares: Dividends on US shares held through EasyEquities, Interactive Brokers, or a similar broker.
- Interest or royalties: US-source interest, or royalties that include a software licence.
What the payer withholds without the form
Without a valid Form W-8BEN-E, a US payer generally withholds 30% of the gross payment. With the form, services by a (Pty) Ltd with no US permanent establishment are Article 7(1) at 0%, ordinary interest is Article 11(1) at 0%, and royalties including software are Article 12(1) at 0%. Dividends stay 5% or 15%.
The form goes to the US payer (the client, platform, or broker). It is not filed with SARS and it is not filed with the IRS. It only documents the withholding rate at source.
Chapter 3 (Line 4): which box a South African entity checks
Line 4 is the Chapter 3 status. The default below is the classification with no Form 8832 on file.
| Entity | Line 4 | Notes |
|---|---|---|
| Public company (Ltd / Limited, including SOC Ltd) | Corporation | Per se corporation. 26 CFR 301.7701-2(b)(8)(i) lists "South Africa, Public Limited Company". Form 8832 cannot change that classification. |
| (Pty) Ltd | Corporation | Corporation by default. A single shareholder does not make it a disregarded entity. Disregarded treatment requires a filed Form 8832. |
| Inc. (personal liability company) | Corporation | Corporation by the member-liability test. Directors are jointly liable for the company's debts. Confirm the classification with an adviser. |
| Close corporation (CC) | Corporation | Corporation by default. |
| Partnership | Partnership | Check Partnership. |
| Trust | Ask an adviser | This page does not classify a trust. |
An operating (Pty) Ltd on the sample below is Corporation on Line 4 and Active NFFE on Line 5.
Line 6 and Line 9b: the address and the SARS tax number
Line 6 is the company's registered address in South Africa. Line 9b is the foreign TIN. For treaty benefits, that foreign TIN is enough. A US EIN is not required.
| Number | Use on Line 9b |
|---|---|
| Income tax reference number | Yes. This is the SARS tax number: 10 digits, and the first digit is 0, 1, 2, 3, or 9. The sample uses 9123456783. |
| 13-digit ID number | No. An ID number is not the income tax reference number. |
| VAT number | No. A VAT number starts with 4. It is the wrong number for Line 9b. |
| CIPC company registration number | No. The company registration number is not the tax number. |
| US EIN | Not required for treaty benefits. Line 8 stays blank unless the payer asks for a US TIN. The foreign TIN on Line 9b is enough. |
The income tax reference number on the sample, 9123456783, is a 10-digit example with a valid check digit. It is not a real SARS number.
What a completed W-8BEN-E looks like for a South African (Pty) Ltd
An example: Savanna Software (Pty) Ltd, software services for US clients, Active NFFE, no US permanent establishment, Article 7(1) at 0% on services (business profits), Line 14b active trade or business.
For illustration only. Sample facts: Savanna Software (Pty) Ltd, 100 Main Road, Rosebank, Johannesburg, Gauteng 2196, income tax reference number 9123456783, Chapter 3 Corporation, Active NFFE, Part III South Africa, Line 14b Company with an item of income that meets active trade or business test, Line 15 Article 7(1), 0%, services (business profits). Signed by Thabo Ndlovu. The name, address, and tax number are fictional.
Treaty rates by income type
Each row is the US withholding rate for that income when the condition in the last column is met. Line 15 cites the rate paragraph.
| Income | Article (Line 15) | US rate | Condition |
|---|---|---|---|
| Services by a (Pty) Ltd | Article 7(1) | 0% | 0% with no permanent establishment in the United States. Staff working in the US for more than 183 days in any 12-month period on the same or a connected project creates a permanent establishment (Article 5(2)(k)). |
| Services by an individual (W-8BEN) | Article 14 | 0% | Form W-8BEN. 0% with no fixed base in the United States. More than 183 days in the US in any 12-month period counts as a fixed base. |
| Software licence fees, YouTube/AdSense, other royalties | Article 12(1) | 0% | 0% on royalties. Copyright explicitly includes computer software, films, and audio and video recordings. Line 15 cites Article 12(1). Article 12(2) is the definition, not the rate. |
| Interest | Article 11(1) | 0% | 0% on interest under Article 11(1). Contingent interest that is not portfolio interest is up to 15% under Article 11(5)(a). REMIC excess inclusions have no treaty rate under Article 11(5)(b). |
| Dividends — company holding directly at least 10% of the voting stock | Article 10(2)(a) | 5% | 5% only when a company holds directly at least 10% of the voting stock. Not for a RIC or REIT dividend. |
| Dividends — everyone else, including individuals | Article 10(2)(b) | 15% | 15% for everyone else, including an individual. RIC dividends are also 15%. |
| Equipment rental | Article 7(1) | 0% | 0% as business profits with no US permanent establishment. Equipment rental is not a royalty under this treaty. |
Line 15 cites the rate paragraph: Article 7(1), Article 10(2)(a), Article 10(2)(b), Article 11(1), or Article 12(1). There is no 0% dividend rate. A 15% royalty rate is the domestic rate people type from habit; the treaty rate on royalties is 0%.
Line 14b: the Article 22 test
An operating (Pty) Ltd checks “Company with an item of income that meets active trade or business test” (Article 22(3)). The South African business must be substantial relative to the activity in the United States. The safe harbor is that assets, gross income, and payroll in South Africa are each at least 7.5% of the US activity, and their average is above 10%. A typical service exporter meets that safe harbor because there is no US activity to compare. A company whose business is making or managing investments is not engaged in an active trade. The alternative is ownership and base erosion under Article 22(2)(f): on at least half the days of the year, at least 50% of each class of shares is owned by individual residents of South Africa or the United States (and other qualified persons), and less than 50% of gross income is paid or accrued as deductible payments to persons who are not residents of either country. A company listed on the Johannesburg Stock Exchange can use the publicly traded test in Article 22(2)(c). This treaty has no derivative benefits test, so that box stays empty. Article 22 is the limitation on benefits article, so the “No LOB article in treaty” box is the wrong one.
A blank IRS form, or a filled PDF?
The blank form is free from the IRS. The wizard asks the South Africa questions and fills Line 14b and Line 15 from the same rates as the table above.
| Step | What you do |
|---|---|
| Blank form | Download W-8BEN-E or W-8BEN from irs.gov and complete every line yourself. |
| Line 15 | Cite Article 7(1), 10(2)(a), 10(2)(b), 11(1), or 12(1), with the rate from the table. |
| Line 14b | An operating (Pty) Ltd uses the active trade or business test. There is no derivative benefits test. |
| Wizard | {path|w8ben-e-form#wizard|W-8BEN-E ($30)} for a company, or {path|w8ben-form#wizard|W-8BEN ($5)} for a sole proprietor or freelancer. |
Frequently asked questions
Short answers for a (Pty) Ltd and for a freelancer paid from the United States.
Is there a US–South Africa tax treaty?
Yes. The convention was signed at Cape Town on 17 February 1997 and is generally effective from 1 January 1998. There is no protocol.
My client withheld 30% on my software licence fee. Why?
The payer did not have a Form W-8BEN-E that claims Article 12(1) at 0%. After you give the payer that form, ask the payer about a refund or an adjustment. A refund is the payer's process, and this page does not promise one.
Which number goes on Line 9b: tax number, company registration number (CIPC) or VAT?
The income tax reference number: 10 digits, first digit 0, 1, 2, 3, or 9. The CIPC registration number is not the tax number. A VAT number starts with 4 and is the wrong number. A 13-digit ID number is not the TIN.
I'm a freelancer on Upwork — Article 7 or 14?
Article 14, on Form W-8BEN. Article 7 is business profits of a company. A freelancer with no fixed base, and not present in the United States for more than 183 days in any 12-month period, claims 0%.
Does my single-shareholder (Pty) Ltd count as disregarded?
No. A (Pty) Ltd is a Corporation by default. One shareholder does not make it a disregarded entity. Disregarded treatment requires a filed Form 8832.
How much is withheld on US shares I hold through EasyEquities or IBKR?
15% for an individual, under Article 10(2)(b). 5% only for a company that holds directly at least 10% of the voting stock, under Article 10(2)(a). That 5% rate does not apply to a RIC or REIT dividend. RIC dividends are 15%.
Do I need a US EIN?
No. For treaty benefits the foreign TIN on Line 9b is enough. That number is the SARS income tax reference number.
Which Line 14b box does an operating (Pty) Ltd check?
Company with an item of income that meets active trade or business test (Article 22(3)). This treaty has no derivative benefits test. Article 22 exists, so “No LOB article in treaty” is the wrong box.
Is equipment rental a royalty?
No. Under this treaty, equipment rental is business profits. A (Pty) Ltd with no US permanent establishment cites Article 7(1) at 0%.
How long is Form W-8BEN-E valid?
Generally through the last day of the third calendar year after the year of signing, unless the facts on the form change. A form signed in 2026 is valid through 31 December 2029.
Related guides
The same form in other English-speaking countries, plus the individual wizard.
- Australian Pty Ltd: W-8BEN-E for an Australian Pty Ltd
- New Zealand limited company: W-8BEN-E for a New Zealand limited company
- UK Ltd: W-8BEN-E for a UK Ltd
- Entity type on Line 4: Full guide to Line 4
- Sole proprietor or freelancer: W-8BEN wizard ($5)
Common mistakes
- ID number on Line 9b: A 13-digit ID number is not the TIN. Line 9b is the 10-digit income tax reference number.
- Article 14 for a (Pty) Ltd: Article 14 is independent personal services for an individual on Form W-8BEN. A (Pty) Ltd cites Article 7(1) for services.
- 15% on royalties: A 15% royalty rate is a habit from other forms. Software, YouTube, AdSense, and other royalties are Article 12(1) at 0%.
- Derivative benefits on Line 14b: This treaty has no derivative benefits test. Leave that box empty.
- “No LOB article in treaty”: Article 22 is the limitation on benefits article. That box is the wrong one.
- Form W-8BEN-E from a sole proprietor: A sole proprietor and a freelancer file Form W-8BEN.
- Equipment rental as Article 12: Equipment rental is not a royalty under this treaty. It is business profits, Article 7(1), with no US permanent establishment.
US withholding, not South African company tax
This page is about US withholding on payments to a South African company or freelancer. It does not decide how South Africa taxes those profits.
South African company tax on the income, once it is received, is a question for a tax adviser in South Africa. Form W-8BEN-E only documents what the US payer withholds.
Ready to finish Form W-8BEN-E for the (Pty) Ltd?
The wizard asks the same questions as this page and suggests the article and rate for Line 15.