My company is Mexican and we were chosen to receive a fund (donation) from an American company. They ask me to fill out a form and they give me the following options: w9, w8 ECI and W8 BEN. it can be an individual form or an entity form. Which one should I fill?
What form of taxes should I use if I am going to receive a US fund and my company is in Mexico?
Answers
All of them. If you want to understand the reasons why you are asked to fill out those forms, google the term FATCA.
The IRS, on behalf of the US Treasury Department, is supervising all transactions that are carried out in US-denominated currency worldwide. All Banks handling $ transactions with US-related individuals or companies must report these transactions to the US authorities. Banks outside the US do have the responsibility to verify that individuals or companies dealing with US transactions are not subject to US worldwide income tax liabilities since they are either US citizens or tax residents in the United States.
You do NOT fill out all those forms. Those forms are mutually exclusive.
So use
W9 if you are an entity or an individual that is a resident of the US for tax purposes
use W8 ECI if you are an entity that receives income effectively connected with the conduct of a trade or business in the US
use W8 BEN if you are an individual who is not a tax resident in the US and is the beneficial owner of income
The reason they sent you three forms is because they did not know which one applied to you.
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Tax