Form W-8BEN-E is the IRS form on which an entity organised outside the United States certifies to a payer that it is a foreign entity and the beneficial owner of the payment for United States withholding and reporting purposes. The form is not filed with the IRS; it is given to the payer and kept on file. Completing it does not make a company in Turkey a United States taxpayer, and it does not by itself guarantee that no withholding will apply. What determines the outcome is whether the income is United States source, what type of income it is, and which article of the Turkey–United States double taxation treaty applies.
Companies in Turkey working in software, gaming, digital services, consulting and licensing frequently receive a request for Form W-8BEN-E from United States based customers or international platforms. The request usually arrives before the first payment, during vendor onboarding, and an incomplete or incorrect form can result in withholding at 30% on the gross amount.
What is Form W-8BEN-E?
The full title is Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities). It is used by entities organised outside the United States to certify their status under Chapter 3 (withholding on payments to non-resident persons) and Chapter 4 (FATCA) of the United States Internal Revenue Code.
The form performs three functions at once:
- Certification of foreign status: evidence that the company is not a United States person for tax purposes.
- Certification of beneficial ownership: confirmation that the entity signing the form is the beneficial owner of the income.
- Treaty claim: a claim for a reduced rate, or for the absence of a source-country taxing right, under the Turkey–United States double taxation treaty.
The form is never sent to the IRS. It is provided to the payer or withholding agent that requested it, and that party retains it.
Which W form applies?
The most common mistake in practice is selecting the wrong form. The distinction depends on the status of the recipient and on whether the income is effectively connected with a trade or business in the United States.
| Form | Who uses it | Main function |
|---|---|---|
| W-9 | Persons and entities treated as United States persons for tax purposes | Reporting the taxpayer identification number and avoiding backup withholding |
| W-8BEN | Individuals resident outside the United States | Certifying foreign status and claiming treaty benefits |
| W-8BEN-E | Entities organised outside the United States that are the beneficial owner | Certifying foreign status, FATCA status and claiming treaty benefits |
| W-8ECI | Foreign persons whose income is effectively connected with a United States trade or business | Filing on a net basis in the United States instead of suffering withholding |
| W-8IMY | Intermediaries, flow-through entities and certain trusts | Documenting the beneficial owners standing behind the entity |
A company incorporated in Turkey does not become a United States company merely because it receives payments from a United States customer or platform, and it does not use Form W-9 for that reason.
Does payment into a bank account in Turkey remove the requirement?
No. The fact that funds are remitted to a bank account in Turkey does not remove the payer’s documentation obligation. What matters on the United States side is the status of the payer, the type of income and whether the income is United States source under the sourcing rules.
That distinction has a practical consequence: for services, the place where the services are actually performed is the decisive test. Fees for services performed in Turkey are not United States source income even where the payment originates in the United States. By contrast, amounts paid for the use of intangible property in the United States may be United States source.
| Type of income | United States source? | Statutory withholding | Treaty ceiling |
|---|---|---|---|
| Services performed in Turkey (software development, consulting, support) | As a rule, no | — | Article 7 – taxable only in Turkey absent a permanent establishment |
| Services physically performed in the United States | Yes | 30% (net basis if effectively connected) | Articles 5 / 7 – permanent establishment threshold applies |
| Royalties (copyright, licence, know-how) | Yes, if used in the United States | 30% | Article 12 – 10% |
| Use of industrial, commercial or scientific equipment | Yes | 30% | Article 12 – 5% |
| Interest | Yes | 30% | Article 11 – 15%; 10% on loans granted by financial institutions |
| Dividends | Yes | 30% | Article 10 – 20%; 15% where the recipient company holds at least 10% |
Does the form create a United States tax liability?
No. Form W-8BEN-E is a status certification, not a tax return. Completing it does not mean the company is subject to United States corporate income tax, has to file a United States return, or operates in the United States. The purpose of the form is precisely the opposite: to establish that the entity is organised outside the United States.
A United States filing obligation generally arises where a trade or business is carried on in the United States or the income is connected with a United States place of business. In that case Form W-8ECI is used instead of Form W-8BEN-E and the income is reported on a net basis.
What if the group also has a company in the United States?
The existence of a subsidiary or affiliate in the United States does not by itself change the status of the company in Turkey. The analysis turns on the following elements:
Contracting party
Which legal entity signed the service or licence agreement?
Performing entity
Which entity actually renders the service or supplies the product?
Owner of the income
In which entity’s accounts is the revenue recognised?
Beneficial owner
Which legal entity is the beneficial owner of the payment?
Where the beneficial owner of the income is the company in Turkey, the analysis is carried out on that company. Where the contract and the revenue belong to the United States entity, or that entity is the party to the transaction, different United States obligations arise, including the use of Form W-9. In group structures of this kind, the transfer pricing dimension under Article 13 of the Corporate Income Tax Law should also be assessed.
Which fields are most often completed incorrectly?
Lines 1–2 · Name and country of organisation
The full name recorded with the trade registry must be used. An abbreviated trading name, a brand name or a branch name can invalidate the form.
Line 4 · Chapter 3 status
A joint stock company established in Turkey is listed in the United States regulations as a per se corporation. A limited liability company is an eligible entity for classification purposes and, absent an election to the contrary, is treated as a corporation where all members have limited liability.
Line 5 · Chapter 4 (FATCA) status
Operating companies that are not financial institutions usually fall within the active NFFE category. Ticking the box alone is not enough; the corresponding certification part of the form must also be completed.
Line 6 · Permanent residence address
The actual address in the country of residence must be given. A post office box, an accountant’s address or a correspondence-only address may not be accepted.
Lines 8 / 9b · Tax identification number
The tax identification number issued in Turkey is entered in the foreign TIN field. A United States employer identification number is required only in specific circumstances.
Part III · Treaty claim
The country of residence, the limitation on benefits test met under Article 22 and the rate applicable to the specific type of income must each be stated. Leaving these fields blank causes the claim to be rejected.
What to do when a request arrives
- Identify the payment and the partiesEstablish the status of the payer, the contracting entity and where the services are performed.
- Select the correct formForm W-8BEN-E applies where the recipient is an entity, is the beneficial owner and carries on no trade or business in the United States.
- Assess source and income typeDetermine whether the income is United States source and whether it is business profit or a royalty.
- Prepare the treaty claimIdentify the article, the rate and the limitation on benefits test under Article 22, and document the reasoning.
- Sign the current version of the formAlways download the current version from irs.gov and have it signed by an authorised signatory. Send it to the requesting party, not to the IRS.
- Set a validity calendarRecord the renewal date and the obligation to report changes in circumstances.
How long does the form remain valid?
As a general rule, Form W-8BEN-E is valid from the date it is signed until the last day of the third succeeding calendar year. A form signed at any point during 2026 therefore remains valid, as a rule, until 31 December 2029. The day and month of signature do not change that period.
If a change in circumstances makes any information on the form incorrect, the form ceases to be valid earlier and the payer must be notified within 30 days, together with a replacement form. Changes of name, address, entity status and ownership structure may fall within this rule.
In addition, when the IRS issues a new revision of the form, earlier versions remain acceptable only for a limited period. The current version should therefore be used each time a request is received.
How is FATCA status determined?
The Chapter 4 status field relates to the United States Foreign Account Tax Compliance Act. The Model 1 intergovernmental agreement between Turkey and the United States was signed on 29 July 2015; the law approving its ratification, Law No. 6677, was published in the Official Gazette on 16 March 2016, and the date of entry into force was set as 14 June 2021 by Presidential Decision No. 6032.
Active NFFE
Operating companies that are not financial institutions and whose passive income and passive assets remain below the applicable thresholds. Most manufacturing, service and software companies in Turkey fall into this category.
Passive NFFE
Entities whose income consists mainly of interest, dividends, rent and similar passive items. This status also raises the question of disclosing substantial United States owners.
Financial institution
Banks, custodial institutions and certain investment entities. These entities may also be asked for a global intermediary identification number.
What are the consequences on the Turkey side?
Value added tax
Services rendered to a customer abroad and used abroad may benefit from the export of services exemption under Articles 11/1-a and 12/2 of the Value Added Tax Law. Both conditions — the service being rendered for a customer abroad and being used abroad — must be met together.
Corporate income tax deduction
Where software, engineering, design, data storage, data processing and similar services are rendered to non-residents, 80% of the resulting income may be deducted on the corporate income tax return under Article 10(1)(ğ) of the Corporate Income Tax Law. The deduction requires the entire amount of that income to be transferred to Turkey by the filing deadline for the return of the relevant accounting period.
Crediting tax withheld in the United States
Where tax has been withheld in the United States, it may be credited against corporate income tax computed in Turkey under Article 33 of the Corporate Income Tax Law. The credit cannot exceed the amount found by applying the corporate income tax rate in Turkey to the foreign income concerned, and any excess may be carried forward until the end of the third following accounting period.
The credit requires the tax paid abroad to be evidenced by documents obtained from the competent authorities of that country and certified by a Turkish embassy or consulate. In practice, the Form 1042-S issued by the payer should also be obtained as supporting documentation.
Frequently asked questions
Do we send Form W-8BEN-E to the IRS?
Does completing the form mean no tax is withheld in the United States?
Do we need a United States employer identification number?
Is app and game revenue business profit or royalty income?
How long is Form W-8BEN-E valid?
Can tax withheld in the United States be credited in Turkey?
Is a certificate of residence also required?
W-8BEN-E and international tax advisory
We assist companies earning income from international customers and digital platforms with:
- Determining the correct W form and preparing Form W-8BEN-E according to entity status
- Assessing the applicable article, rate and Article 22 test under the Turkey–United States double taxation treaty
- Reviewing the business profit and royalty distinction on a contract-by-contract basis
- Determining and documenting FATCA status
- Crediting and evidencing foreign tax under Article 33 of the Corporate Income Tax Law
- Applying the export of services exemption and the deduction under Article 10(1)(ğ)
