To ensure we adhere to requirements mandated by the CRA and 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.
Depending on your US Person status, you may be required to sign a W-8BEN, W-9, or W-8BEN-E for certain types of accounts.
W-8BEN and W-8BEN-Es 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!
It’s important to note that the W-8BEN and W-8BEN-E forms expire every 3 years. When you’re nearing the 3 year mark, or if you need to update your information, we’ll reach out to you to sign a new W-8BEN or W-8BEN-E form to ensure you’re able to continue to received reduced withholding tax rates on all US sourced income in your account.
W-9s 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). For more information, visit https://www.irs.gov/instructions/iw9
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 CRS 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.