Form W-8BEN for Amazon, Etsy & eBay Sellers: A Step-by-Step Guide & Tax Rates by Country

Selling goods on international marketplaces like Amazon, Etsy, or eBay? Then you have definitely encountered Form W-8BEN. For many entrepreneurs, this document looks complicated and incomprehensible, but in fact, filling it out is your direct path to significant tax savings.

If you ignore this form, the U.S. Internal Revenue Service (IRS) will automatically withhold 30% tax from your income. But there's good news: thanks to international treaties, you can legally reduce this rate to 0%.

In this article, we will explain in simple terms what this form is, how to fill it out, and most importantly, which treaty articles and paragraphs to reference for residents of Ukraine, Poland, Germany, and other countries in Europe and Asia.

What is Form W-8BEN and why is it so important?

Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting) is an official IRS document with which you confirm that:

• You are not a U.S. tax resident.
• You are the beneficial owner of the income you receive.

By filling it out, you activate the benefits of the Double Taxation Treaty between your country and the U.S. For sellers on Amazon, Etsy, and eBay, this means that profit from selling goods should be taxed only in your country of residence, not in the USA.

'Business Profits' and 'Permanent Establishment': Two Key Concepts

To claim a 0% rate, your income must meet two conditions according to tax treaties:

• It is 'Business Profits'. Income from selling goods on marketplaces perfectly fits this category.
• It is not connected to a 'Permanent Establishment' in the U.S. This means you do not have an office, warehouse (using Amazon FBA warehouses does not count), employees, or other permanent business base in the USA.

For 99% of international sellers on these platforms, both conditions are met.

How to Fill Out the Key Section of W-8BEN on Amazon, Etsy, and eBay

The most important part of the form is the 'Claim of Tax Treaty Benefits' section. Here is what you need to specify:

• Country: Select your country of tax residence.
• Article and Paragraph: Specify the number of the article and paragraph from the treaty (we will provide them below).
• Withholding Rate: Specify '0%'.
• Type of Income: Write 'Business Profits'.
• Reason: Briefly explain the reason. The phrase 'Business profits not attributable to a permanent establishment in the U.S.' is ideal.

Rates and Treaty Articles for Your Country (Latest Revisions)

Find your country in the list and use this data when filling out the form. For all the countries listed below, the tax rate on income from sales (business profits) is 0%.

As you can see, for the vast majority of countries, Article 7, paragraph 1 applies. It states that the profit of an enterprise is taxed only in its country of residence, unless it has a permanent establishment in the USA.

Don't be afraid of Form W-8BEN. It's a standard tool designed to protect you from double taxation. By filling it out correctly once, you ensure you receive the full income from sales on Amazon, Etsy, and eBay without a 30% U.S. tax withholding.