What Is Form W-8ECI?
The ECI withholding certificate is an IRS form under which a foreign beneficial owner declares US-source income effectively connected with a US trade or business.
Also known as: Certificate of Foreign Person's Claim of Effectively Connected Income, W-8ECI form.
How Form W-8ECI works
Form W-8ECI is given by a foreign person, such as a foreign company, to the withholding agent or payer before US-source income is paid, so that income effectively connected with a US trade or business is reported on a US return instead of being withheld at source. The form requires a US taxpayer identification number, and no withholding under sections 1441 or 1442 is then required on effectively connected income. The beneficial owner then reports the income on an annual US return, where it is taxed after allowable deductions at graduated rates applicable to US persons. Partnership income stays subject to section 1446(a) withholding, and effective connection depends on US federal rules and the facts.
Form W-8ECI vs Form W-8BEN
Unlike Form W-8BEN, which a non-resident alien individual uses to certify foreign status and claim treaty rates on income not connected with a US business, Form W-8ECI certifies that the income is effectively connected with a US trade or business and belongs on a US return.
Example
Illustrative example: A consultancy incorporated in Country A runs a US office and invoices a US client for work done there. The consultancy gives Form W-8ECI showing its EIN, the client does not withhold under section 1442, and the fees, net of deductions, go on a US corporate return.
Common misconception
Myth: Giving Form W-8ECI to a US payer ends any US tax on the income.
Reality: Form W-8ECI generally replaces withholding at source with taxation on an annual US return, where effectively connected income is taxed after deductions at graduated rates.
Frequently asked questions
Does Form W-8ECI require a US tax ID number?
Form W-8ECI is valid only when the foreign beneficial owner provides a US taxpayer identification number, generally an EIN for entities or an ITIN or SSN for individuals.
What is the difference between W-8ECI and W-8BEN?
Form W-8ECI covers income effectively connected with a US trade or business and reported on a US return, whereas Form W-8BEN documents a foreign individual's status and treaty claims on other US-source income.
Related terms
- Form W-8BEN — Individual form often confused with W-8ECI
- Withholding Agent — Party which receives and relies on the form
- EIN (Employer Identification Number) — US TIN which foreign entities enter on the form
Related guides
- Incorporation options for location-independent entrepreneurs — Entity choices where US business income may arise
- Tax treaties and international taxation — Treaty context for withholding on US-source income
Sources
Last verified: 2026-10-08. This entry is general information, not tax or legal advice; rules vary by country and change over time.
