The Tax Consequences Of Affiliate Marketing In Foreign Countries

When you have an affiliate who lives outside the United States, is not a U.S. citizen and who receives compensation for, or in expectation of, affiliate marketing services performed for you, you must obtain the foreign equivalent of a W-9, called a W-8BEN, from the affiliate. Form W-8BEN establishes that a foreign affiliate is not a U.S. employee and claims the income. You are required to withhold 30 percent of the affiliate's income for taxes if you do not receive Form W-8BEN.
Many countries have tax treaties with the United States that provide an exemption from certain kinds of income or a withholding rate that's lower than the default 30 percent foreign tax. If a foreign affiliate lives in a country with a tax treaty, he should specify the specifics of the treaty agreement on Form W-8BEN, and you should withhold at the rate designated by the treaty. Foreign affiliates must either have a Social Security Number or obtain a Taxpayer Identification Number from the Internal Revenue Service to claim tax treaty benefits.
If you have a foreign affiliate who lives outside the United States but is a U.S. citizen, the affiliate is not considered a foreign affiliate for U.S. income tax purposes and is not subject to 30 percent withholding. Obtain Form W-9 from nonresident citizens rather than Form affiliate marketing aliexpress W-8BEN. If a foreign affiliate can claim U.S. residency for income tax purposes because she spent a certain amount of time in the U.S. over the previous three years, she is not subject to 30 percent withholding and should file Form W-9 with you instead of Form W-8BEN.
Although, as a matter of policy, you might request a new Form W-8BEN each year from your foreign affiliates, the elections a foreign affiliate makes on the form are valid for three years from the date of the form. In some circumstances, the elections on Form W-8BEN remain in effect indefinitely until the foreign affiliate notifies you of a change in circumstances. Foreign affiliates are required to notify you of a change in circumstances, such as moving to a different country or changing U.S. taxpayer status, within 30 days of the change.