How do I determine the correct treaty rate to put on Form W-8BEN?

You look it up in IRS Publication 901: US Tax Treaties. Brazil is interesting because it does NOT have a comprehensive tax treaty with the US, only a limited tax-information-exchange agreement. Most Brazil creators end up with 30% statutory withholding.

Step-by-step process:

Step 1: Identify the income type.

For YouTube/AdSense, this is royalties — payment for the use of intellectual property (your video content). Treaty rates for royalties are typically the lowest.

For freelance services billed to a US client, this is business profits (Article 7 in most treaties). Generally treaty-protected only if the foreign person has NO US permanent establishment.

For interest or dividends from US investments, those have different articles and rates.

Step 2: Identify your tax-residence country.

This is where YOU file your individual tax return. For most people, same as citizenship. For digital nomads, this can be ambiguous — choose the country where you're legally tax-resident under that country's rules.

Step 3: Find the US-Country treaty.

Go to IRS Publication 901. The treaty table lists rates by country and income type.

For Brazil: NO comprehensive treaty. Brazilian creators pay the 30% statutory rate.

Step 4: Find the article on royalties (typically Article 12).

For countries WITH treaties, look at Article 12 of the US-Country treaty. Examples (rates as of 2024):

Some countries have multiple rates depending on type of royalty (e.g., for industrial vs. cultural). For YouTube/AdSense, it's typically the "general royalty" rate, not a specialized rate.

Step 5: Enter on W-8BEN Part II.

Line 9: Country (your tax-residence country)

Line 10: Article (e.g., "Article 12")

Line 10: Paragraph (e.g., "paragraph 2" or "subparagraph (b)" depending on treaty)

Line 10: Rate claimed (e.g., "10%")

Line 10: Type of income (e.g., "royalties")

Line 10: Additional conditions if any

Common confusion — "what if I don't know the article?"

You can leave the article blank and just enter the country, type of income, and rate. The US payer (Google) will accept this. The IRS will not penalize you for not citing the specific article number, as long as the rate you claim is supported by the treaty.

Common error — claiming a rate the treaty doesn't support:

If you claim 0% but the treaty only supports 10%, the IRS can later disallow the claim and demand the 10% with interest. Most countries with US treaties have well-known royalty rates — verify before submitting.

Special case: limited beneficial owner concept (LOB).

Many modern US treaties have "Limitation on Benefits" (LOB) clauses that prevent treaty shopping. To claim a treaty rate, you must be a "qualified resident" of the treaty country — generally meaning you really live there and aren't just using it as a tax shelter.

For individual creators living and working in their country of citizenship, LOB is rarely an issue. For corporations or shell entities, LOB can be tricky.

For the EA exam:

Know:

• Publication 901 is the lookup source
• Treaty rates vary by country and income type
• Royalties (Article 12) is the typical income for YouTube/AdSense
• Brazil is the canonical "no treaty" country
• LOB clauses prevent treaty shopping

This is regularly tested on EA Part 2.