Foreign vendors and the W-8BEN
Foreign contractors give a W-8BEN, not a W-9; services performed abroad get no 1099; and the form lapses after three full calendar years.
A developer in Portugal who works only from Portugal gives Northwind a W-8BEN, not a W-9. Income for services performed outside the United States is foreign-source, so no 1099 is filed for it. A W-8BEN does not last forever: signed on September 14, 2026, it stays in effect until December 31, 2029, unless something on it changes first. Put the date on the vendor record and ask for a new one before it lapses.
Where this lesson's rules come from
The sources behind this lesson's requirements, by kind. Anything marked as a convention is ours, not the rule-maker's.
- Federal statute
- IRC §862(a)(3) (opens in a new tab)Services performed outside the US are income from sources without the United StatesFree to read
- IRS guidance
- Instructions for Form W-8BEN (Rev. October 2021), Expiration of Form W-8BEN (opens in a new tab)A W-8BEN lapses after three full calendar yearsFree to read
- Official form
- Form W-9 (Rev. March 2024), Foreign person (opens in a new tab)A foreign person does not give a W-9PDF · Free to read
- Form W-8BEN (Rev. October 2021) (opens in a new tab)Form W-8BEN, Certificate of Foreign Status of Beneficial Owner (Individuals)PDF · Free to read
The words this page teaches
Each links to its glossary definition, which also names the authority behind it and the components that render it.
- Form W-8BENThe certificate a foreign individual gives a US payer, in place of a Form W-9, to establish foreign status. Entities use Form W-8BEN-E. Generally in effect until the last day of the third calendar year after the year it is signed
- Form W-9The IRS form a US payee gives a payer to certify its name, tax classification and taxpayer identification number — collected before the first payment, because it drives 1099 reporting and backup withholding
- Vendor masterThe record of every approved vendor — legal name, tax classification, TIN, tax form on file, bank details, default terms and who approved the setup. Bank details are versioned, never overwritten
See also
- W-9s and backup withholding: a vendor onboarding guideWhen to ask for a W-9, how IRS TIN matching works, and what happens when a vendor won’t give you one: 24% backup withholding, owed by you.
- Form 1099-NEC for startups: threshold, deadline, e-filingWho gets a 1099-NEC, the new $2,000 threshold, why a W-9 comes first, what goes on a 1099-K instead, and the deadlines, penalties and state copies.
- Form 1099-NECThe IRS form that reports what you paid a US contractor for services. For payments made in 2026, you file one for each contractor paid $2,000 or more in the year (the IRS can adjust that for inflation from 2027); for 2025 payments the threshold was $600. Payments to corporations (other than for legal services), and payments made by card or through a payment processor, generally don't need one.