Overview
To meet the requirements of the Canadian Revenue Agency and the Internal Revenue Service (IRS), Wealthsimple has to collect information from clients about their tax status in both Canada and other countries. We ask you questions about your tax status and request that you sign a few forms to confirm this information for our records.
Continue below for details about W-forms and self-certification of tax residency.
Understanding W-forms
Depending on your US person status, you may need to sign a W-8BEN, W-9, or W-8BEN-E form for certain types of accounts.
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W-8BEN and W-8BEN-E forms certify that you (or your company) are not a US person and, therefore, are not subject to US taxation and reporting requirements from the IRS.
- All clients have to sign a W-8BEN or W-8BEN-E to confirm this. These forms also allow Canadian residents to receive reduced withholding tax rates on US-sourced income.
- Since most Wealthsimple portfolios include US ETFs, this reduction means you can keep more of your dividend returns.
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Note: W-8BEN and W-8BEN-E forms expire every three years. We'll contact you to sign a new form when you're nearing the three-year mark or if you need to update your information. This ensures you can continue to receive reduced withholding tax rates on US-sourced income in your account.
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W-9 forms certify that your country of residence for tax purposes is within the United States.
- The Canadian and United States governments require this form due to their agreements.
- A completed and updated W-9 form allows for lower withholding taxes on US-sourced income, meaning you receive more after-tax income. Learn more about W-9 forms.
Self-certification of tax residency
Similar to information about US persons, we also have to collect information about any tax residencies our clients may hold outside of Canada and the US. We ask you for information about any tax residencies you may have and collect the corresponding tax number for those countries that offer them.
Even if you do not have any other tax residency, all clients must fill out the Common Reporting Standard form to open their accounts. While this form doesn’t expire, please get in touch with our team if any changes are required. They can send you a new form to complete.
Frequently asked questions
Is the email from notifications@o.wealthsimple.com a legitimate email from Wealthsimple?
Yes, the email is legitimate. You received that email because, according to our records, the tax documents on file (for W-8BEN-E) for one or more of your businesses have expired and you need to provide a renewed version. We appreciate you being vigilant about your account information at Wealthsimple.
What’s the difference between a W-8BEN-E form and a W-8BEN form?
Both the W-8BEN and W-8BEN-E forms are US IRS mandated forms designed for non-US persons to declare tax treaty claims and receive reduced withholding tax rates on US-sourced income. The main differences are:
- Purpose: The W-8BEN form is for individuals, while the W-8BEN-E form is for certain types of entities.
- Certification: The W-8BEN form certifies that the individual is not a U.S. person, while the W-8BEN-E form certifies that the entity is not a U.S. person and has no income connected to a trade or business in the United States.
- Signatory: The W-8BEN form is signed by the account owner, while the W-8BEN-E is signed by the authorized signatory of the account owner (the entity).
Why do I have to update the W-8BEN-E form every 3 years?
The US government mandates a three-year validity period. According to the IRS rules, a Form W-8BEN-E will remain valid for a period starting on the date the form is signed and ending on the last day of the third succeeding calendar year, unless a change in circumstances makes any information on the form incorrect.
Why do I have US-sourced income in my Wealthsimple business account if Wealthsimple is a Canadian company?
Your business may have US-sourced income (dividends, interests) when your business has invested in symbols listed on a US exchange. In a Wealthsimple Managed business account, your portfolio may include US-listed ETFs. This means your business may receive US-sourced dividends or interests.
I only have a Save for Business account and no Invest for Business account. Why do I still have to fill out the W-8BEN-E form?
In theory, your Save for Business account won’t receive any US-sourced income, so you’re right that technically a W-8BEN-E form isn’t required. However, since the W-8BEN-E form is entity-specific and not account-specific, we’re required to collect and maintain the form when the entity is onboarded, regardless of the types and number of business accounts the entity has.
I have one corporation with multiple Wealthsimple Business accounts. How many copies of the W-8BEN-E form do I need to submit?
The W-8BEN-E forms are tied to the entities. If you have one corporation, you only need to submit one W-8BEN-E form, regardless of how many accounts the corporation has with Wealthsimple. If you have multiple corporations, you will need to submit one W-8BEN-E form for each of the corporations, regardless of how many accounts each corporation has with Wealthsimple.
What should I do if I'm unsure about filling out the W-8BEN-E form?
We included many tips and helpful links in the document. However, we recognize that it can be challenging to understand the IRS terminologies. In addition to visiting the IRS W-8BEN-E official website for additional instructions, we recommend consulting with your business lawyer or accountant for guidance.
Can I close my business account instead of renewing the W-8BEN-E form?
If your account balance is $0 and you no longer need your corporate accounts open, you technically don’t have to submit an updated W-8BEN-E form. Instead, you can close your accounts.
What happens if I don’t provide an updated version of the W-8BEN-E form?
If you don’t submit the updated W-8BEN-E for your identified entity by December 31, 2024, all the investment accounts owned by the entity will no longer be eligible for the reduced withholding tax rate on US-sourced income starting January 1st, 2025. We highly recommend that you provide an updated W-8BEN-E for your entity as soon as possible.
What is the reduced withholding tax rate for the US-sourced income? What is the full withholding tax rate?
The reduced withholding tax rate is 15% while the full rate is 30%.
How do I submit a new W-8BEN-E form?
You can click on the link provided in the email and fill out your full name and the email address associated with your Wealthsimple account to start renewing your W-8BEN-E via DocuSign. The form is available in English and French.
To submit the form:
- Check I agree to use electronic records and signatures
- Select Continue
- Use the orange button on the left of the page to navigate all the mandatory fields in the documents
- Once filled and signed, click Finish to submit the W-8BEN-E.
How long will it take for you to review my updated W-8BEN-E form and update my entity’s records?
Due to an unprecedented influx of year-end requests, our team is experiencing an extremely high volume of work. While we're working diligently to review your submission as quickly as possible, it may take a few weeks for us to get back to you should there be an issue.
Suppose you submit your DocuSign by the end of 2024 and everything is in good order. In that case, we will update your entity’s records as soon as possible so that your business accounts continue to benefit from reduced withholding tax rates in 2025 and onwards.
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