Overview
To ensure we adhere to requirements mandated by the Canadian Revenue Agency and Internal Revenue Service (IRS), we are required to collect information from our clients about their tax status both within Canada, and other countries. To do so, we need to ask you certain questions about your tax status and ask all clients to sign a couple of forms to confirm this information and ensure it’s stored in our records.
W-forms
Depending on your US Person status, you may be required to sign a
W-8BEN and W-8BEN-E forms
W-8BEN and W-8BEN-E forms are your certification that you, or your company, are not a US Person, and therefore not subject to taxation and reporting required by the IRS for US Persons. All clients are required to sign a W-8BEN or W-8BEN-E to make this certification.
In addition, the W-8BEN and W-8BEN-E forms allow Canadian residents to receive reduced withholding tax rates on US sourced income. As most Wealthsimple portfolios hold US ETFs, this means that the non-resident tax we must apply to dividends on US ETFs can be reduced so that you can keep more of those dividend returns.
W-9 forms
W-9 forms are your certification that your country of residence for tax purposes is within the United States. The W-9 is a required form resulting from agreements between the Canadian and United States governments. A completed and updated W-9 allows lower withholding taxes on US source income (i.e., you receive more after-tax income). Learn more about W-9 forms.
Self-Certification of Tax Residency
Similar to information about US Persons, we are also required to collect information about any tax residencies our clients may hold outside of Canada and the US. To do this, 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 are required to fill out the Common Reporting Standard form in order to open their accounts. While this form doesn’t expire, if any changes are required, please get in touch with our team who 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, it is a legitimate email. 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 are 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 3-year validity period is mandated by the US government.
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 business Save 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
- Click Continue
- Use the orange button on the left of the pages 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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