Recently, Sinai Maple bid on a contract in the U.S.,and we won it! We discovered that we needed to fill a certain IRS form (e.g. W-8BEN-E in our case) to reduce the amount of tax withholding by the U.S. client. As we’re already a registered Canadian Corporation paying taxes in Canada, we are protected by a tax treaty between Canada and USA. The treaty means that we may be exempt from certain source tax withholding in the U.S. These tax withholding provisions can be 30% in some states.
To fill out the W-8BEN-E form, we discovered that we needed to get an EIN number.
So what is this EIN number?
An EIN (Employer Identification number) is a number used to identify businesses: sole proprietorships, corporations, partnerships, or other non-personal entities, and is also called the Federal Tax Identification Number. It could be considered the U.S. equivalent of the Canadian Business number. The EIN is the number used by the IRS to track your business activity in the U.S., as well as for tax filing purposes. More importantly, you need to use your EIN number while completing forms stating that you are a foreign entity.
So we went through the steps, and now Sinai Maple has an EIN number!
Useful advice: If you want to bid on contracts in USA, apply for an EIN number today!
Helpful information sites to have:
Found this video very useful: http://youtu.be/SW2AA75VFuk