Guides

Tax Documentation FAQ

This page explains the tax documentation the Taxbit React SDK collects — what each form and questionnaire is, who completes it, and why it's collected. Once a document has been submitted and reviewed:

  • To understand when a submitted Tax Document must be remediated, what makes one unacceptable, and the specific issues and warnings Taxbit flags, see the Remediation FAQ.
  • For acceptable examples of curing documentation and best practices for reviewing it, see Curing Documentation.

What types of tax documentation does the SDK collect?

The Taxbit React SDK collects three types of tax documentation, each tied to a different reporting regime:

  • W-FORM — US tax documentation, collected on IRS Forms W-9 and W-8 (see the questions below).
  • DPS — the Digital Platform Seller interview, supporting DAC7 and other Model Reporting Rules for Digital Platforms (MRDP).
  • SELF-CERT — self-certification supporting the Common Reporting Standard (CRS), Crypto-Asset Reporting Framework (CARF), and DAC8.

For integration steps, see the Integration Guide.

What is a "Tax Document"?

For purposes of these FAQs, a Tax Document refers to one of the following IRS-issued forms:

  • Form W-9, Request for Taxpayer Identification Number and Certification
  • Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)
  • Form W-8BEN-E, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities)
  • Form W-8IMY, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Intermediaries or Flow-Throughs)
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Note: The IRS has also issued additional tax documents (i.e. Form W-8EXP, Form W-8ECI), that are currently not supported by Taxbit.

What is a Form W-9?

A Form W-9 is completed by US residents or citizens and is used to establish an individual and entity's US tax status, as well as collect and confirm the tax identification number (TIN), either Social Security Number (SSN) or Employer Identification Number (EIN). The information provided on a Form W-9 is commonly used to complete, and file a Form 1099.

For US tax purposes, the definition of a US person includes:

  • A citizen or resident of the United States
  • A domestic partnership
  • A domestic corporation
  • Any estate other than a foreign estate
  • Any trust if:
    • A court within the United States is able to exercise primary supervision over the administration of the trust, and
    • One or more United States persons have the authority to control all substantial decisions of the trust
  • Any other person that is not a foreign person

An individual may be considered a US resident for tax purposes if they meet the Substantial Presence Test for a calendar year.

In the SDK, the W-9 questionnaire captures name, TIN (SSN or EIN), address, and certification, and supports real-time TIN validation against the IRS.

What is a Form W-8?

The W-8 (Series) Forms are completed by non-US residents, and are commonly used to establish an individual or entity's Non-US status, and provide other related information, if applicable. The different types of Forms W-8 are completed based on the type of end customer providing the form, and sometimes the type of income being received. For example, Individuals will always fill out a Form W-8BEN, while Corporations will likely fill out a Form W-8BEN-E.

A Form W-8 is collected to facilitate reporting related to certain payments of US Fixed, Determinable, Annual & Periodic (FDAP) income on Forms 1042-S.

The SDK collects the following Forms W-8:

  • Form W-8BEN — for foreign individuals. Captures name, country of citizenship, foreign TIN, and treaty claim information.
  • Form W-8BEN-E — for foreign entities. Captures entity classification, chapter 3/4 status, and treaty claims.
  • Form W-8IMY — for intermediaries and flow-through entities.

US FDAP income treaty claim information is collected when the treatyClaims prop is enabled.

For additional IRS guidance, see the Form W-8/9 FAQs.

What is the Digital Platform Seller (DPS) interview?

The Digital Platform Seller (DPS) interview collects Account Owner information needed to satisfy reporting obligations under the Model Reporting Rules for Digital Platforms (MRDP). This includes:

  • DAC7 — an EU directive requiring Reporting Platform Operators to report certain information about sellers who use their platforms.
  • Local MRDP implementations — the United Kingdom, New Zealand, and Canada have adopted their own versions of the OECD ruleset.

The SDK collects seller identification, tax residency, VAT information, and financial account details. VAT numbers are automatically validated through the EU VIES system.

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Note: DPS is the only questionnaire type that does not produce a downloadable PDF.

What is the Self-Certification (SELF-CERT) questionnaire?

The Self-Certification questionnaire collects Account Owner information to support global information reporting requirements:

  • CRS (Common Reporting Standard) — the OECD framework for automatic exchange of financial account information between jurisdictions.
  • CARF (Crypto-Asset Reporting Framework) — extends CRS-style reporting to crypto-asset service providers.
  • DAC8 — the EU directive extending DAC scope to crypto-asset service providers on exchanges.

The SDK collects tax residency declarations, TIN information, and entity classification. For individuals with tax residencies in high-risk countries, an additional tax residencies confirmation step is presented.

Why is a Tax Document collected?

In general, a Tax Document is collected for purposes of identifying whether an end customer is a US Person, and assists in determining whether an end customer should receive certain year-end information return (i.e., Forms 1099, 1042-S, etc.).

This supports the filer's reporting obligations. Filers of Forms 1099-B, 1099-DIV, and 1099-INT must file with a certified TIN, which is collected on a Form W-9, and must therefore have a process in place to collect and validate Forms W-8/9 ahead of payment and reporting, or otherwise be subject to certain backup withholding obligations. Filers of other Forms 1099 may also be required to collect Forms W-8/9 in certain instances, including the receipt of a B-notice.

For clarity, Taxbit assists with the collection of Tax Documents at the request of platforms. An end customer should contact the platform that is requesting a Tax Document with any questions regarding why a Tax Document is being requested.

What happens if a submitted Tax Document isn't acceptable?

When a Tax Document (primarily Form W-8BEN, W-8BEN-E, or W-8IMY) is submitted, the collector is responsible for reviewing it — alongside other information on file for the end customer — to determine whether it is acceptable and can be relied upon. A document may be unacceptable because it was not completed properly, or because the information on it is inconsistent with, or conflicts with, other information on file.

Remediation is generally necessary when a Form W-8:

  • Is invalid due to facial errors
  • Contains US Indicia
  • Contains in-care-of or P.O. Box information
  • Has expired (a Form W-8's reliability expires at the end of the third calendar year following the signature date)
  • Is affected by a detected Change in Circumstances for the Account Owner

There are two ways to resolve these issues: submit a new Form W-8, W-9, or Self-Certification, or obtain curing documentation. For the full list of curable and non-curable issues and the related remediation actions, see the Remediation FAQ. For best practices on reviewing curing documentation, see Curing Documentation.