If you’re a musician or music producer from Europe and you’re using a digital distributor like DistroKid to sell your music online, you may have heard of the W8-BEN form. In this blog entry, we’ll explain what the W8-BEN form is, why it’s needed, and how to fill it out.
What is the W8-BEN form? The W8-BEN form is a tax form used by non-US citizens who earn income from US sources. It’s used to declare your status as a foreign individual or entity and to claim any tax benefits you may be entitled to under a tax treaty between your country and the United States.
Why is it needed? When you distribute your music through a digital distributor like DistroKid, you’re essentially selling your music in the US market. This means that you may be subject to US tax withholding, which is a percentage of your earnings that is withheld by the US government to ensure that taxes are paid on your income. However, if your country has a tax treaty with the US, you may be entitled to a reduced or zero tax withholding rate. To claim this benefit, you need to fill out the W8-BEN form.
How to fill out the W8-BEN form The W8-BEN form can be completed online or on paper. If you’re completing it online, you can do so through the IRS website. If you’re completing it on paper, you can download the form from the IRS website, the online US service you are using can provide that too (Distrokid or Songtrust for example). Just follow the instructions provided. Here’s a brief overview of the information you’ll need to provide:
- Your name and address
- Your country of citizenship and tax identification number (if applicable)
- Your foreign tax identification number (if applicable)
- Your status as a foreign individual or entity
- Your claim for tax treaty benefits, including the specific treaty article and the percentage rate of withholding you’re claiming
- Your signature and the date you signed the form
It’s important to note that you’ll need to provide a separate W8-BEN form for each entity and service that is earning income from US sources. For example, if you’re both an individual artist and a member of a band that is earning income from US sources (Distrokid, CdBaby, Songtrust…), you’ll need to fill out a separate W8-BEN form for each entity and service.
In conclusion, the W8-BEN form is an important tax form that European musicians and music producers need to be aware of when selling their music online in the US market through digital distributors like DistroKid. By filling out the form correctly, you can claim any tax benefits you’re entitled to under a tax treaty between your country and the US, and ensure that you’re not overpaying on US taxes. You can be saving with that like 30% in your hard to earn music royalties.
