Do I fill out a W-8BEN form if I want to trade stocks in the US?

Asked 4 years ago

Hi, I want to trade US stocks because they look like they could be rather lucrative. However, I'm a foreigner and live in South Africa. Someone told me that if I wanted to trade US stocks, then I would need to fill in a W-8BEN form, do I? What is a W-8BEN form for?

W-8ben form Tax law Tax payments

Andrew Moran

Friday, September 03, 2021

Although South Africa does not possess an income tax treaty with the United States, you will still need to fill out a Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting document. This can be achieved with your broker or financial institution.
The W-8 forms is for foreigners who are not a resident of the United States and are claiming a reduced U.S. tax withholding.
W-8 forms are the law that allows you to file a claim for a reduction on the tax withheld from U.S. income. The current rate is 30%, but the W-8BEN cuts it to 15% on dividends or zero on interest.