Payees that have claimed the "Other Income (Services)" income type on any of the W-8 tax forms are presented the Certificate of No U.S. Activities during onboarding in the Supplier Hub. This Certificate determines whether the payee's service will be performed in the US.
If payees sign the certificate, it means they are claiming that they have no income connection to the US in terms of location, employees or equipment; and consequently, their payments are not subject to any withholding.
Expiration
The Certificate of No U.S. Activities has no expiration date. However, if you requested annual renewal of the Certificate, then a notification is sent to payees 60 days before the expiration date. If they don't sign the Certificate by the deadline, they become unpayable and are notified that their Certificate has expired.
Withholding rates
The Certificate of No U.S. Activities applies only to the "Other Income (Services)" income type.
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If the certificate has been signed, withholding rates are not applicable for:
- W-8BEN
- W-8BEN-E
For the following tax forms, the rate is 0%:
- W-8IMY
- W-8EXP
- If the certificate has not been signed and:
- The payee is an individual and tries to fill in the W-8BEN in the Supplier Hub, they are directed to the 8233 tax form and the relevant withholding rates are applied.
- The payee is a company, the payee needs to fill in the W-8BEN-E form in the Supplier Hub and claim the relevant treaty rates.