Category: Tax

How to Register an Australian Company for Business with the USA Government

If you want to sell anything to a US government entity, or bid on a US government contract, you need to be on the Central Contractor Registration list and to do this you need to open a user account within the System For Award Management (SAM). Like everything the US government does it is an incredibly painful and slow process. These are the steps you need to go through.

  1. Get a D-U-N-S number. In theory if you have an Australian ABN you have an D-U-N-S number, but this does not seem to always be true. If you don’t already have a D-U-N-S number then you just need to complete this form and email to Dun & Bradstreet Australia and in a few days they will email you back your D-U-N-S number. It is free and the form is not too complex, although it does not seem to be well formatted.
  2. Check that the D-U-N-S details for your company are correct. If the details need to be updated (address, phone number, etc) then just send an email from a company email address to D&B at clientservices@dnb.com.au with the changes needed. It is really important that the details with D&B are correct.
  3. Register for a NCAGE number. To do this you need to search for your details on the NATO Codification Tools page. Assuming nothing comes up then you can then fill out the NCAGE Application Form. Most of it is straightforward, except for the Organization Data – Additional Information section. Here you are expected to enter information on your classification. I just completed the 
  4. Confirm your NCAGE application.  Once you have entered everything and submitted the form you will be sent a email that contains a confirmation link you need to click on. An email will be sent to you that explains that your application has been sent to the Australian Department of Defence. The applications appears to be handled by one person in defence, but he is very helpful and friendly. The only thing extra he needed from me was our ABN. The application process is supposed to take two weeks before you get your NCAGE number (mine took a week).
  5. Wait for your NCAGE number to enter the US CAGE system. Once you have a NCAGE number you need to wait for the information to be sent to the USA and be entered into the US CAGE system. This took 12 days for me, but my application did cross over the Thanksgiving period so it might be quicker normally. To know when your company is in the CAGE system you need to check for your details in the Business Identification Number Cross Reference System (BINCS). This site is run by the US military and interestingly my browser considered their https certificate to be invalid. Considering it is impossible to get a .mil domain unless you are part of the US military this is not something to really worry about.
  6. Register with SAM. Once you have your NGAGE and D-U-N-S numbers (and they are in the US CAGE system), then you can begin the process of registering with the System For Award Management (SAM). There is a hard to find, but very helpful, step-by-step guide in Word format (.docx) of what you need to do on the SAM site. To access this guide click on the main HELP tab, then clicking on Demonstration Videos, then click on View Transcript of the video entitled Register a New Entity in SAM to be Eligible for Government Contracts (you can watch the video too, but I prefer instructions in writing). The SAM registration process is long, but pretty straightforward except for a few tricky points. The basic process involves:
    1. Creating a User Account. After clicking on Create User Account you are given the choice of creating an Individual Account or a System Account. Choose Individual Account and then fill in the form. The only tricky part is you need to change the country to Australia before you can enter the correct phone number. Once you submit the form you will be sent a confirmation email which you need to click.
    2. Once you have confirmed your email and logged into the SAM system you need to go to the Register New Entity page which is accessed from the left hand side menu. Click on the START REGISTRATION button. You will be warned you need a DUNS and NGAGE number.
    3. On the Purpose of Registration select Business or Organisation for the What type of entity are you. Select Yes for Do you wish to bid on Contracts.
    4. From this point on rely on the SAM transcript guide as the process gets amazingly complex. Many of the questions don’t apply to an Australian company and a lot of the questions you can push off into the future by just selecting you will supply the information with a specific bid later. The big one to watch out for is don’t put anything in the Taxpayer Identification Information field unless you want to deal with the IRS. There does not seem to be anyway of registering a Australian bank account so you will need to choose to have any payment mailed to you with a cheque unless you happen to have a US bank account.
  7. Wait for your registration to be approved. This was actually quite efficient and it only took 12 hours with my application. You will be sent an email letting you know when you are approved. You do have to renew your registration in a little less than 12 months so mark this down in your diary. You can also update any information about your company later by logging into the SAM system and selecting Update.
  8. Profit!

Update for 2016

I have gone through the renewal process and it is pretty straightforward. SAM sends you an email reminder a month out and you just have to follow the instructions in the email. The only issue is you have to reset your password as SAM expires your password after 180 days (why is beyond me). Other than that it is just a lot of clicking through confirmation pages that everything is the same as last year – the whole things takes around 30 minutes.

How to complete the W-8BEN-E Form for Australian Companies

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The IRS seems to be over just making the life of Americans a misery and they have decided the whole world should experience their special attention. If you are a foreign business with no presence in the USA, but you have US customers, then you need to complete and provide your customers with a copy of the W-8BEN-E Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities).

This form is eight long pages of IRSese with such easy to understand terms as “Nonparticipating FFI (including a limited FFI or an FFI related to a Reporting IGA FFI other than a registered deemed-compliant FFI or participating FFI)”. If anyone know what this means please post, because nobody at the IRS seems to know – at least nobody who answers the phones.

When faced with completing this form for the first time it is near impossible to know what you need to fill in and the IRS instructions are as clear as mud. To save other poor Australians the nightmare of completing the W-8BEN-E form on their own, here is my step-by-step guide for standard Australian companies (i.e. those owned and run by Australians) of what you need to do.*

*Disclaimer. I am not a USA tax lawyer or accountant! Use this guide as a starting point for knowing what you need to do and always consult a professional. Do not use these instructions if you are a US citizen or have a US company branch.

Edit (2016). The IRS updated their form in 2016 so I have updated the instructions. Amazingly they have made the form even more complicated – there really is no form too complicated that the IRS can’t make it worse.

Edit 2 (2017). Once again the IRS has updated the form in 2017 and so the IRS tread mill continues. I am sure everyone will be surprised to learn it is now even more complex.

Edit 3 (2019). The IRS has made the form even more confusing (again) so I have updated the instructions (again). My thanks to the IRS for making this post evergreen.

Edit 4 (2021). The IRS has made the form even longer. I have updated the instructions again – it looks like this post is never going to die.

Edit 5 (2023). A small clean-up of this post since it remains popular. I am starting to get a warm fuzzy feeling about the IRS.

Step 1. Get the W-8BEN-E form
Download the W-8BEN-E form from the IRS website. If the form has moved then just google for it – the IRS seems to like to move the forms around on their website fairly regularly just to keep things interesting for all of us.
Print out the form as I find it easier to fill it in by hand and scan, but if you have a pdf editor then that is a good alternative.

Step 2. Complete Part I
Question 1. Write your full business name (eg. “xyz pty ltd”)
Question 2. Write “Australia”
Question 3. Leave blank
Question 4. Tick “Corporation”. Don’t tick the “yes” or “no” box on the line “If you entered disregarded entity, partnership, simple trust, or grantor trust above, is the entity a hybrid making a treaty claim? If ‘Yes’ complete Part III.”
Question 5. Only tick “Active NFFE. Complete Part XXV”
Question 6. Write your registered business address in Australia.
Question 7. Write your mailing address in Australia. If it is the same as 6. then just write “As Above”.
Question 8. Leave blank.
Question 9a. Leave blank.
Question 9b. For the “Foreign TIN” write in your company’s ABN.
Edit. Technically, your company’s tax file number is the TIN, but some sources have suggested that you supply your ABN, not TFN (others say TFN). I am much happier to supply people with my company’s ABN rather than TFN. I suspect in the end it doesn’t matter too much since the ATO has the ability to crossmatch your ABN and TFN – the whole point of this form is for the IRS and ATO to share data on a company’s income.
Question 10. Leave blank.

That is the easy first two pages taken care of! Now to Part III (you can skip Part II).

Step 2. Complete Part III
Question 14a. Tick the check box and write “Australia”.
Question 14b. Tick the check box “The beneficial owner derives the item (or items) of income for which the treaty benefits are claimed, and, if applicable, meets the requirements of the treaty provision dealing with limitation on benefits. The following are types of limitation on benefits provisions that may be included in an applicable tax treaty (check only one; see instructions):”
On the 14b. sub-question choose: “Company with an item of income that meets active trade or business test”. This is assuming most of your business activity is in Australia.
 Question 14c. Leave blank.
Question 15. Write “Article 7, Paragraph 1” for the claiming provisions line; “Zero” for the % rate; and “Business Profit” for the type of income line. For the explanation write “Australian entity with no US permanent establishment deriving business profit not subject to withholding tax under the USA-Australian tax treaty”. Skip to page 7.
Edit. For non-Australian companies you should be able to find the corresponding article number for your country’s tax treaty with the USA (all the tax treaties are all listed on the IRS website). You will need to read through your tax treaty to find the right article to use (look for the article concerning “business profit”). For example, in the UK-USA tax treaty the article number is the same as Australia’s (Article 7).

Step 3. Complete Part XXV
Question 39. Tick the check box (assuming the three points are true which should be the case if you are completing this form for a standard Australian company).
Skip to page 8.

Step 4. Complete Part XXX
Sign the form, print your name, and write the date with dashes. Don’t forget to use the crazy USA system where you put the month first then the day. The IRS cares about this sort of thing!
Tick the box that says that you have the capacity to sign (assuming that you do).

Step 5. Scan
Scan the document. To keep the size manageable scan it as a B&W document at 200 dpi and save as a pdf file (it should be under 500 KB). You can then email this when you send invoices to your USA customers. The form is supposed to be valid for 3 years after which time you are going to have to go through the whole form filling process again.

/s Now wasn’t that simple! Thank you IRS for making this form so easy and providing such clear and simple to follow instructions for us all. /s