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Is W-8BEN the Tax Withholding Form For non-resident Alien ? Arnie Goetchius 05-05-2007
Posted by Arnie Goetchius on May 5, 2007, 6:17 am
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 A non-resident alien ( i.e. not a U.S. person) living in and
a citizen of Greece will soon draw a pension from an
American company based on his work in the U.S a number of
years ago.

The treaty between the US and Greece provides that there is
no US tax due on any income under $10,000 a year. Since the
pension will be under $10,000, presumably there is no tax
due. If that is true, then there should be no withholding
from his pension check.

Ordinarily, I would say use a W4P to exclude have any
deduction for income tax. However, based on my search of the
U.S Treasury/IRS web site, it appears that this person
should use form W-8BEN and use lines 9 and 10 "to claim a 0%
rate of withholding".

Do I have that correct?

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<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
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Posted by A.G. Kalman on May 7, 2007, 1:09 pm
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 Arnie Goetchius wrote:

> A non-resident alien ( i.e. not a U.S. person) living in and
> a citizen of Greece will soon draw a pension from an
> American company based on his work in the U.S a number of
> years ago.
>
> The treaty between the US and Greece provides that there is
> no US tax due on any income under $10,000 a year. Since the
> pension will be under $10,000, presumably there is no tax
> due. If that is true, then there should be no withholding
> from his pension check.
>
> Ordinarily, I would say use a W4P to exclude have any
> deduction for income tax. However, based on my search of the
> U.S Treasury/IRS web site, it appears that this person
> should use form W-8BEN and use lines 9 and 10 "to claim a 0%
> rate of withholding".
>
> Do I have that correct?

You are looking at the wrong treaty article. You are looking
at Article X that deals with compensation for personal
services. You want Article XI that deals with private
pensions. As the individual is not a US citizen, US
National or US Resident Alien, Article XI states that any
pension paid by the US to a resident of Greece for services
rendered previously in the US is not taxable by the US.

Use the W-8BEN to claim exemption, but quote Article XI.

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Arnie Goetchius on May 8, 2007, 12:52 am
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A.G. Kalman wrote:
> Arnie Goetchius wrote:

>> A non-resident alien ( i.e. not a U.S. person) living in and
>> a citizen of Greece will soon draw a pension from an
>> American company based on his work in the U.S a number of
>> years ago.
>>
>> The treaty between the US and Greece provides that there is
>> no US tax due on any income under $10,000 a year. Since the
>> pension will be under $10,000, presumably there is no tax
>> due. If that is true, then there should be no withholding
>> from his pension check.
>>
>> Ordinarily, I would say use a W4P to exclude have any
>> deduction for income tax. However, based on my search of the
>> U.S Treasury/IRS web site, it appears that this person
>> should use form W-8BEN and use lines 9 and 10 "to claim a 0%
>> rate of withholding".
>>
>> Do I have that correct?

> You are looking at the wrong treaty article. You are looking
> at Article X that deals with compensation for personal
> services. You want Article XI that deals with private
> pensions. As the individual is not a US citizen, US
> National or US Resident Alien, Article XI states that any
> pension paid by the US to a resident of Greece for services
> rendered previously in the US is not taxable by the US.
>
> Use the W-8BEN to claim exemption, but quote Article XI.

Thanks for the correction. I will cite Article XI.

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by cballard@tyyni.net on May 8, 2007, 12:52 am
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> A non-resident alien ( i.e. not a U.S. person) living in and
> a citizen of Greece will soon draw a pension from an
> American company based on his work in the U.S a number of
> years ago.
>
> The treaty between the US and Greece provides that there is
> no US tax due on any income under $10,000 a year. Since the
> pension will be under $10,000, presumably there is no tax
> due. If that is true, then there should be no withholding
> from his pension check.
>
> Ordinarily, I would say use a W4P to exclude have any
> deduction for income tax. However, based on my search of the
> U.S Treasury/IRS web site, it appears that this person
> should use form W-8BEN and use lines 9 and 10 "to claim a 0%
> rate of withholding".

The $10,000 amount in the US-Greece Tax Treaty only applies
to amounts earned for personal services. There's a
different section of the treaty that deals with pension
distributions. The provisions of that section say that
private pensions derived from within the US by an individual
who is a resident of Greece shall be exempt from taxation by
the US.

W-8BEN is the proper form to claim a reduced withholding
rate under the terms of the treaty.

--Chris

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>

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