W-8 BEN for Mexican freelancers: Do they pay taxes with the U.S. tax treaty?

You're on the right track with the W-8BEN forms. These are specifically designed for foreign individuals to claim treaty benefits and establish that they're not US persons for tax purposes. Mexico and the US do have a tax treaty, but how it applies depends on exactly what type of work your freelancers are doing. Generally, Mexican residents providing services entirely in Mexico wouldn't be subject to US withholding tax. The W-8BEN helps document their non-US status and allows them to claim treaty benefits if applicable. The form itself doesn't create a tax obligation - it's actually meant to help avoid unnecessary withholding. Make sure they complete the form correctly, especially Part II where they claim treaty benefits. Keep these forms for your records, as you'll need them if the IRS questions why you didn't withhold taxes.

After struggling with international contractor paperwork for my own film projects, I found a service that saved me tons of headaches with all this tax documentation stuff. Check out https://taxr.ai - they analyze all your contractor situations and tell you exactly which forms you need and how to file them. I was completely lost about whether to use W-8BEN or W-8BEN-E for some of my contractors in Brazil, and their system clearly outlined everything. They even helped me understand which parts of the tax treaty applied to my specific situation with film crew members. Seriously made international payments so much easier.

I have to admit I was wrong about online tax services. I tried https://taxr.ai after posting my skeptical comment and was genuinely impressed. Their system immediately identified the relevant sections of the US-Mexico tax treaty that applied to my situation with local film crew. The service showed me that under Article 14 of the treaty, my Mexican contractors don't face US withholding as long as they don't have a "fixed base" in the US. It even generated customized instructions for how my contractors should complete Part II of the W-8BEN form to properly claim treaty benefits. Saved me from potentially making an expensive paperwork mistake.

If you're still having trouble getting clear answers about your tax obligations, I'd recommend using Claimyr to connect directly with the IRS. I was in a similar situation with contractors in Colombia and spent WEEKS trying to get through to the IRS business line. With https://claimyr.com they got me connected to an actual IRS representative in under 20 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent was able to give me definitive answers about my specific situation with foreign contractors and explained exactly what documentation I needed to maintain. Way better than trying to piece together information from random websites or waiting on hold for hours.

I need to publicly eat my words about Claimyr. After dismissing it, I was desperate enough to try it for my own foreign contractor question and... it actually worked exactly as advertised. Got connected to a surprisingly helpful IRS international tax specialist in about 15 minutes. The agent confirmed that for Mexican residents performing work entirely in Mexico, I needed to collect W-8BEN forms but didn't need to withhold US taxes under the treaty. She also explained I should still issue 1042-S forms to my contractors even though the income was exempt from withholding. This was contrary to what my accountant told me, potentially saving me from compliance issues. Really glad I made that call.

Something else to consider - make sure you're classifying your workers correctly as independent contractors vs employees. Mexico has its own labor laws about this that are pretty strict. If they're working under your direction/control, Mexican authorities might consider them employees regardless of what paperwork you have them sign. If they're true independent contractors, the W-8BEN approach others mentioned is correct. Just document everything carefully!

Has anyone else run into issues with their bank when sending payments to Mexican freelancers? I filled out all the correct tax forms, but my bank still put a 30% hold on the transfers citing "international tax withholding requirements." Even with the proper W-8BEN forms!

I went through this exact situation last year with a documentary project in Guadalajara. The key thing to understand is that the W-8BEN form actually protects your Mexican crew members from US taxation, not the other way around. Under the US-Mexico tax treaty, Mexican residents performing services entirely within Mexico are generally exempt from US withholding tax. The W-8BEN form is how they formally claim this treaty benefit and establish their non-US tax status. Here's what I learned: collect the W-8BEN forms before making payments, keep them for at least 3 years, and make sure your contractors complete Part II correctly to claim treaty benefits. You won't need to withhold any US taxes from their payments, and they won't owe anything to the IRS. One practical tip - have them get their Mexican tax ID (RFC) and register with SAT if they haven't already. This makes the whole process cleaner and gives you better documentation for both countries' tax authorities.

I've been handling international contractor payments for several years now, and one thing I'd add to the excellent advice here is to document the timeline of your project carefully. The IRS sometimes looks at the duration and nature of services when evaluating treaty claims. For film projects, make sure you can show that each contractor's work was completed entirely within the treaty period and location. Keep records of when filming occurred, post-production timelines, and where each person performed their services. This becomes especially important if your project spans multiple months or if you have contractors doing work that could theoretically be done remotely. Also, consider having your Mexican contractors provide a certificate of tax residency from SAT (Mexican tax authorities) along with their W-8BEN forms. While not strictly required, it adds another layer of documentation that strengthens their treaty claim if questions arise later.

This thread has been incredibly helpful! I'm currently working on a similar documentary project with Mexican crew and was completely overwhelmed by the tax implications. Based on what I've read here, it sounds like the W-8BEN forms are actually protective rather than punitive for the contractors - they're essentially declaring "I'm not a US person, so don't withhold US taxes from my payments." The US-Mexico tax treaty then backs this up by exempting Mexican residents performing services entirely in Mexico. One follow-up question: do I need to provide my Mexican contractors with any specific documentation or receipts after making their payments, or is keeping the W-8BEN forms in my records sufficient? I want to make sure they have everything they need for their own Mexican tax filings while protecting my LLC from any compliance issues. Also, has anyone dealt with situations where contractors work both independently on your project AND as employees for other Mexican companies? Does this affect their ability to claim treaty benefits as independent contractors for your specific project?

This has been such a valuable discussion! As someone who's dealt with international contractor paperwork headaches before, I really appreciate everyone sharing their real experiences rather than just theoretical advice. One thing I'd add that might help others in similar situations: consider setting up a simple spreadsheet to track all your W-8BEN forms and contractor information. Include columns for contractor name, RFC number, W-8BEN completion date, payment amounts, and service dates. This makes it much easier if you ever need to reference everything quickly during tax season or for an audit. Also, from my experience working with contractors in several Latin American countries, Mexican freelancers are generally pretty familiar with these tax treaty concepts since Mexico has similar agreements with other countries. Don't be surprised if some of your crew members are already well-versed in the W-8BEN process - many have dealt with it before on other international projects. The key takeaway seems to be that these forms protect everyone involved when done correctly, rather than creating additional tax burdens. Thanks to everyone who shared their practical experiences here!

This thread has been incredibly informative! I'm working on my first international documentary project and was completely lost on the tax implications for Mexican crew members. Reading through everyone's experiences, it's clear that W-8BEN forms are actually protective rather than burdensome for contractors. The fact that the US-Mexico tax treaty exempts Mexican residents performing services entirely in Mexico from US withholding is exactly what I needed to know. I particularly appreciate the practical tips about keeping detailed records, using spreadsheets to track everything, and having contractors get their RFC numbers from SAT. The advice about documenting the timeline and location of all work is something I hadn't considered but makes total sense from a compliance perspective. One quick question - for a small indie production like mine, should I be working directly with each contractor on their W-8BEN forms, or is it better to have them work with a local Mexican accountant who's familiar with US tax treaties? I want to make sure everyone fills out Part II correctly to claim treaty benefits, but I'm worried about giving tax advice when I'm still learning this myself.

This discussion has been incredibly helpful for understanding W-8BEN requirements for Mexican contractors! I'm planning a similar project and had the same concerns about whether these forms would create tax obligations for my crew. One practical question that came up while reading through this: when you're making the actual payments to Mexican contractors, are there any specific payment methods or documentation requirements beyond just keeping the W-8BEN forms? For example, should the payment memo or wire transfer description reference the treaty exemption, or is that unnecessary as long as you have the forms on file? Also, I noticed some mentions of banks potentially withholding taxes even with proper documentation. Has anyone found specific banks or payment services that are better at recognizing these treaty exemptions and not creating unnecessary complications during transfers? I want to make sure the payment process is as smooth as possible for my contractors while maintaining proper compliance on my end.

I've been following this discussion as someone who recently completed my first documentary project with Mexican crew, and I wanted to share one additional resource that helped me tremendously. The IRS actually has a specific publication (Publication 515) that breaks down withholding requirements for foreign persons, including detailed explanations of how tax treaties work. It's pretty dense reading, but Chapter 3 specifically covers the W-8 forms and treaty claims. Having this official reference helped me feel more confident about the process and gave me something concrete to show my bank when they questioned why I wasn't withholding taxes. What I found particularly useful was that Pub 515 includes examples of different contractor scenarios and shows exactly how treaty benefits apply. It confirmed everything that's been discussed here about Mexican residents performing services entirely in Mexico being exempt from US withholding under the treaty. For anyone still feeling uncertain about the process, having this official IRS publication as backup documentation alongside your W-8BEN forms gives you solid footing if questions ever arise. You can find it on the IRS website or through any tax professional. It's definitely worth the time to at least skim through the relevant sections.

This has been such a comprehensive and helpful discussion! As someone who's about to start my first international documentary project with Mexican crew, I feel so much more confident now about the W-8BEN process. What really stands out to me is how everyone's real-world experiences confirm that these forms are protective rather than punitive - they're helping contractors avoid unnecessary US tax obligations, not creating them. The US-Mexico tax treaty clearly supports Mexican residents performing services entirely in Mexico, and the W-8BEN is just the formal way to claim that protection. I'm definitely going to implement the spreadsheet tracking system that was mentioned, and having Publication 515 as official backup documentation gives me the confidence I need to move forward. It's also reassuring to know that most Mexican freelancers are already familiar with this process from other international projects. Thanks to everyone who shared their practical experiences - this kind of real-world insight is so much more valuable than trying to decipher tax regulations in isolation. Time to get those W-8BEN forms organized and start filming!