Hi,
I’m a free-lancer from India and have just got a contract from a company in the US for a job. The employer has sent me an w9 form asking for my Tax Indentification Number, SSN etc none of which I’m eligibile for since I live in a different country. My question is whether he is responsible for withholding any tax of mine or are we supposed to manage our own taxes, in which I should not require to sign any of these forms right? Am I also absolved of any tax liabilities to the US government? Thanks for your answers.
If you don’t live or work in the US, then you don’t owe the US any tax money.
The W9 is only issued to collect tax identification information so that we can report income paid to non-employees to the IRS. They are responsible for paying their own taxes, if owed.
What about the W8BEN form (http://www.irs.gov/instructions/iw8ben/) then? Should I have to fill that out instead? It asks for a ITIN (individual tax identification number) there, can I leave it blank as I’ve found out most people do. Thanks.
Yes - that’s the form to use when you have income from the USA and do not live there.
The instructions on that form says:
Do not use Form W-8BEN if:
You are a nonresident alien individual who claims exemption from withholding on compensation for independent or dependent personal services performed in the United States. Instead, provide Form 8233, Exemption from Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, or Form W-4, Employee’s Withholding Allowance Certificate.
As someone who is not a citizen or resident alien of the US, you are a nonresident alien, and should not be asked to fill out that form.
India and the US do have a tax treaty, like most countries, explicitly agreeing that unless you have a permanent base in the US, you do not have to pay US taxes for income earned while working in India, even if paid by a US company.