Any accountants here? IRS W8-BEN form question

[Mundane]

I have an internet marketing company incorporated in Canada, where I live. Our company has recently received an IRS W-8BEN form from our credit card payment processing company and we have been told by them that if we do not submit the form back to them within 10 days, they will suspend our account. This effectively means our income will quickly be reduced to next to nothing if this happens. Our Canadian chartered accountant has never come across such a form and is not yet able to advise us.

"The Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, is used by foreign persons (including corporations) to certify their non-American status. The form establishes that one is a non-resident alien or foreign corporation, to avoid or reduce tax withholding from U.S. source income, such as rents from U.S. property, interest on U.S. bank deposits or dividends paid by U.S. corporations. The form is not used for U.S. wages and salaries earned by non-resident aliens (in which case Form W-4 is used), or for U.S. freelance (dependent personal services) income (in which case Form 8233 is used). The form requires the foreign person to provide a U.S. Taxpayer Identification Number unless the U.S. income is dividends or interest from actively traded or similar investments. Other W-8 forms handle other international issues."

Purpose of form. Foreign persons are subject to U.S. tax at a 30% rate on income they receive from U.S. I am not an American citizen, nor is my company incorporated in USA. We do not live in USA and less than 20% of our business is with people residing in the USA. However, as all of our payments are processed via a payment processing company located within the USA (there appears to be little or no choice in this matter in Canada when dealing with Canadian POS companies), does this allow the IRS to tax me? Will we now have 30% of all credit cards sales going to the IRS once we fill this out? The credit card processing company in USA was also unable to answer this question.

Thank you.

Note: Title should have said "W-8BEN"

[oyarde]

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[oyarde]

Sorry , Mundane , my accountant has passed away , if you cannot get what you need , pm me and I will send you her Daughters mailing address , she does mine now ...

[Mundane]

Sorry , Mundane , my accountant has passed away , if you cannot get what you need , pm me and I will send you her Daughters mailing address , she does mine now ...

Thank you for your response. My accountant has already filled it out and sent it in. He says we are exempt from the withholding tax. I hope he is right, otherwise, my business will exit the US entirely.

[oyarde]

Thank you for your response. My accountant has already filled it out and sent it in. He says we are exempt from the withholding tax. I hope he is right, otherwise, my business will exit the US entirely.

Absolute Best of Luck to you !