W-8BEN How to fill Part II, line 10. "Special rates and conditions"?

It is a long time since I did this, and I think the numbering of the sections has changed, but:

Are you sure you should be completing Part II? That is for "disregarded entities" and "branches". Are you a "branch" of a larger company? Are you a part of a larger organisation that is "disregarded" for tax purposes? If not, I think Part II does not apply. You should complete Part III.

Hopefully someone else who has done this more recently will comment.

(Are you a business, or an individual? What sort of business?)

I am an individual.

Here is the current version of Part II:

Here's instruction from Department of the Treasury Internal Revenue Service it mentions persons:

Line 10. Line 10 must be used only if you are claiming treaty benefits that require that you meet conditions not covered by the representations you make on line 9 and Part III. This line is generally not applicable to treaty benefits under an interest or dividends (other than dividends subject to a preferential rate based on ownership) article of a treaty. Examples of when you must complete line 10 include: • Persons claiming treaty benefits on royalties must complete this line if the treaty contains different withholding rates for different types of royalties, • Foreign students and researchers claiming treaty benefits must complete this line. See Scholarship and fellowship grants, later, for more information, • Persons claiming treaty benefits on business profits or gains that are not attributable to a permanent establishment must complete this line. See Profits or gains not attributable to a permanent establishment, later, for more information. • Persons claiming treaty benefits pursuant to a remittance provision under a treaty must complete this line. See Remittance claims, later, for more information

Should I fill these two optional text fields? If so, how? I am worried, because it says

After you click Submit, you won’t be able to make changes to this form.

Please help me 🙏

In the text that you quoted:

Persons claiming treaty benefits on business profits or gains that are not attributable to a permanent establishment must complete this line.

I think that does apply to you. You don't have a "permanent establishment" in the US.

You need the article and paragraph number from the treaty: https://www.irs.gov/pub/irs-trty/poland.pdf (which is an interesting bit of history, agreed by Gerald Ford and Edward Gierek during his visit to Washington in 1974!)

I think you need Article 8, paragraph 1.

And the rate of tax you claim is of course zero %.

Thank you very much for your answers!

However this article 8 says about business profits. And I am not a business owner, I will upload apps under my name, as an individual. It’s midnight in my timezone, but if I am still thinking clearly it doesn’t fit my situation. Maybe your first answer was right and I should just leave this line 10. (or maybe even entire Part II?) empty… However I would like to be 100% sure, since I can’t make changes to this form after submission.

Do you know what would be the appropriate e-mail address to use to ask Apple about this?

What you are doing is "business".

You are a "sole trader". (jednoosobowa działalność gospodarcza ??), correct? It's not a company, or "corporation", but it is still "business".

I don't think you can expect Apple to help much, but the way to contact them is via https://developer.apple.com/contact/finance/ - choose "Tax Setup" -> "Tax Forms".

Hello again,

I got a reply from Apple some time ago, which I copied and pasted at the end of this post. Here is the part, that got me thinking, that maybe I don't need to fill part II of W-8BEN at all, since Apple said this:

Since the App Store agreements are characterized as a "sales/commission" agreement, as opposed to a "royalty" agreement, there is generally no tax withholding for sales in the USA App and Book Stores.

Also, in case I should fill part II of W-8BEN, I was looking for tax treaty agreements between Poland and USA, and found out the there is a new 2013 agreement, while you mentioned the one from 1974. However I don't understand whether the old one form 1974 still applies, or should I use some article and paragraph from this new 2013 agreement?

Could you please help me now - should I fill part II of W-8BEN and if so - how (screenshot in the post above), considering these two things (Apple's reply and 2013 tax treaty)?

Reply I got from Apple along with my question:

Hello,

You are required to complete the US tax form setup for the paid agreement you requested, regardless of your country of residence.

The requirements to complete tax forms are usually imposed by the local taxing authorities in the territories where we are doing business. In territories where tax forms are required, the failure to submit the necessary forms may subject you or your company to penalties as well as additional taxes. In certain circumstances, you may not be paid until we receive the completed tax forms and documentation. In territories where submitting tax forms is optional, the consequences of not completing the necessary form may result in taxes being withheld, sometimes at a higher than normal withholding tax rate.

Tax forms and instructions are available in the Agreements, Tax, and Banking module in iTunes/App Store Connect. Which U.S. tax form you will need to complete will depend on several factors. iTunes/App Store Connect will ask you questions and direct you to the U.S. tax form that is appropriate for your situation. 

If your iTunes legal entity is located in the U.S., you will be required to complete a form W-9 and provide a US tax ID.

If you are located outside the U.S., the W-8BEN or W-8ECI may be required depending on if you have any business activities in the U.S. and/or are required to file a U.S. income tax return. Do not provide the tax ID 000-00-0000 as this is invalid. Non-US residents and non-US legal entities are not required to provide a US tax ID.

Once the US tax setup is complete for your agreement, your banking will update and the contract will go live within 24 hours.

Because everyone’s tax situation is unique you may need to address any tax setup questions with your tax advisor. 

Since the App Store agreements are characterized as a "sales/commission" agreement, as opposed to a "royalty" agreement, there is generally no tax withholding for sales in the USA App and Book Stores.

Thank you.

  Finance Support Apple Media Services

On June 23, 2022 at 12:49:31 PM GMT,  wrote:

Hello, I am doing tax setup on my App Store Connect account. I am from Poland and will upload Apps as an individual / sole proprietor. I need your help with filling the form W-8BEN. First off, from what I understand, by submitting this form, I can take advantage of the benefits of the double taxation avoidance agreement between Poland and the US, correct? So after I fill it, I will be charged (on the income from the sale of Apps) 0% tax in US and will only pay tax once - in Poland, correct? In Part I, line 6.a. Foreign Tax Identifying Number is optional, but I believe it will do no harm to fill it, correct? In part II, lines 9. and 10. - I need your help. How should I fill these? Or maybe I should not fill part II at all? Please help me. Best regards,  

Hello again,

I got a reply from Apple some time ago, which I copied and pasted at the end of this post. Here is the part, that got me thinking, that maybe I don't need to fill part II of W-8BEN at all, since Apple said this:

Since the App Store agreements are characterized as a "sales/commission" agreement, as opposed to a "royalty" agreement, there is generally no tax withholding for sales in the USA App and Book Stores.

Also, in case I should fill part II of W-8BEN, I was looking for tax treaty agreements between Poland and USA, and found out the there is a new 2013 agreement, while you mentioned the one from 1974. However I don't understand whether the old one form 1974 still applies, or should I use some article and paragraph from this new 2013 agreement?

Could you please help me now - should I fill part II of W-8BEN and if so - how (screenshot in the post above), considering these two things (Apple's reply and 2013 tax treaty)?

Reply I got from Apple along with my question:

Hello,

You are required to complete the US tax form setup for the paid agreement you requested, regardless of your country of residence.

The requirements to complete tax forms are usually imposed by the local taxing authorities in the territories where we are doing business. In territories where tax forms are required, the failure to submit the necessary forms may subject you or your company to penalties as well as additional taxes. In certain circumstances, you may not be paid until we receive the completed tax forms and documentation. In territories where submitting tax forms is optional, the consequences of not completing the necessary form may result in taxes being withheld, sometimes at a higher than normal withholding tax rate.

Tax forms and instructions are available in the Agreements, Tax, and Banking module in iTunes/App Store Connect. Which U.S. tax form you will need to complete will depend on several factors. iTunes/App Store Connect will ask you questions and direct you to the U.S. tax form that is appropriate for your situation. 

If your iTunes legal entity is located in the U.S., you will be required to complete a form W-9 and provide a US tax ID.

If you are located outside the U.S., the W-8BEN or W-8ECI may be required depending on if you have any business activities in the U.S. and/or are required to file a U.S. income tax return. Do not provide the tax ID 000-00-0000 as this is invalid. Non-US residents and non-US legal entities are not required to provide a US tax ID.

Once the US tax setup is complete for your agreement, your banking will update and the contract will go live within 24 hours.

Because everyone’s tax situation is unique you may need to address any tax setup questions with your tax advisor. 

Since the App Store agreements are characterized as a "sales/commission" agreement, as opposed to a "royalty" agreement, there is generally no tax withholding for sales in the USA App and Book Stores.

Thank you.

  Finance Support Apple Media Services

On June 23, 2022 at 12:49:31 PM GMT,  wrote:

Hello, I am doing tax setup on my App Store Connect account. I am from Poland and will upload Apps as an individual / sole proprietor. I need your help with filling the form W-8BEN. First off, from what I understand, by submitting this form, I can take advantage of the benefits of the double taxation avoidance agreement between Poland and the US, correct? So after I fill it, I will be charged (on the income from the sale of Apps) 0% tax in US and will only pay tax once - in Poland, correct? In Part I, line 6.a. Foreign Tax Identifying Number is optional, but I believe it will do no harm to fill it, correct? In part II, lines 9. and 10. - I need your help. How should I fill these? Or maybe I should not fill part II at all? Please help me. Best regards,  

found out the there is a new 2013 agreement

That has not been ratified by the US Congress, so the 1974 treaty still applies.

Non-US residents and non-US legal entities are not required to provide a US tax ID.

Interesting.

That has not been ratified by the US Congress, so the 1974 treaty still applies.

Thank you for this information!

Do you think this quote from e-mail ⬇️ means that I can leave Part II blank (since as Apple said "there is generally no tax withholding for sales in the USA App and Book Stores") or should I input Article 8, paragraph 1 which you mentioned anyway?

Since the App Store agreements are characterized as a "sales/commission" agreement, as opposed to a "royalty" agreement, there is generally no tax withholding for sales in the USA App and Book Stores.

I think the more important part of their email is the one that I quoted, saying "Non-US residents and non-US legal entities are not required to provide a US tax ID."

That conflicts with my experience, which was a few years ago.

I don't have anything to add to what I said earlier. I got a US Tax ID for my business, which was not difficult, and used it to complete the form. Apple now tell you that that is not necessary. Either what I did was unnecessary, or they are wrong, or something has changed. I don't know which. You might consider following their advice and find yourself a local tax advisor with suitable experience who can tell you what to do.

You might consider following their advice and find yourself a local tax advisor with suitable experience who can tell you what to do.

I have found two local tax advisors, who will probably have suitable experience, but they have long waiting times for visit, so I was hoping to get advice earlier here on Apple Forums from somebody who did it.

I don't have anything to add to what I said earlier.

So if I input "Article 8, paragraph 1", and "0%" it will be all fine? I'm sorry for asking again, but I just really don't want to mess up this form.

it will be all fine?

Definite Maybe.

Definite Maybe.

Oh.

Hi PennyLane

How did you solve the problem at the end? Did you compile the Part ii?

I’m also an alien individual (located in Switzerland) and I have the same problem.

I consulted the documentation several times in all the languages I know, but I’m still not sure about the correct approach.