If a Canadian software provider's servers are in the U.S. does that qualify as U.S. sourced?
I have a plant that uses a foreign software provider in Canada for data cleansing and internet access use. I found out that the supplier's servers are in the US. Due to this fact, is our spend with this supplier US sourced?
This is a tricky issue, not least of which becuase it actually could be US sourced for a couple of reasons. Let's look at what you need to examine and then go from there.
Are we required to obtain the newest revised Form W-9 from our Vendors at the time of payment?
The IRS released their revised Form W-9 to expand the exemptions box on the front of the form to incl. entry for the Exempt Payee code and exemption from FATCA reporting code. Currently we requesting the new revised Form W-9 when it is a new Vendor set up, Name and/or TIN change. Are we required to obtain the new revised Form W-9 from our Vendors at the time of payment?
"Exemption from FATCA code (if any)" - per Form W-9 general instuctions "The following codes identify payees that are exempt from reporting under FATCA" ... you may leave it blank.
What do I do when a US Person completes or doesn't complete the "Exemption from FATCA code"? What is the best practice? Should we require to have this completed by all US Persons? If so, should we note this code in the Vendor Master for future audit or reporting?
Of course the IRS has regularly revised the W-9 and will continue to do so. As part of your due diligence and compliance activities you must respond. In this case and in answer to your questions here is what you need to know.
We will be attending a student expo in China next month. At the expo we plan on giving away cash prizes. Is it still okay to just collect the W8ben assuming they are all Chinese nationals and no other documentation is needed?
We will be attending a student expo in China next month. At the expo we plan on giving away cash prizes to 9 winners. The cash prize would be wired from our US bank account to their personal accounts in China. The winners will be chosen from students who sign up on our US website.
While they are not in the US, they prizes will be given from our US accounts. Is it still okay to just collect the W8ben assuming they are all Chinese nationals and no other documentation is needed? Is it legal for a US company to hold a sweepstakes like this in China or is there an obligation for our company to report that to the Chinese goverment? Thanks for all your help, it is very much appreciated!
Obviously this is a complicated issue. Nevertheless there are some steps you can take to cut through those problems and that revolve around answering a series of questions. From there, let's get to answering your questions...
Is it okay to hire international students for a day at promotional events we do if they do no have Social Security Numbers?
Is it okay to hire international students for a day at promotional events we do if they do no have Social Security Numbers?
There are a number of different ways possible reporting could go. As such we will cover several sets of circumstances and then go from there. Let's start with some assumptions about the locatin of the work and the nature of the payee...
We recently paid a company in China to print luggage tags for us to use in the US. What tax documents do I need?
We recently paid a company in China to print luggage tags for us to use in the US.
What tax documents do I need?
There are a number of key issues here. They revolve around documenting, validating, withholding, and reporting. Moreover, they will depend upon (and most simply) how you answer the questions: who, what, and where. Let's get started as follows....
We are going to attend a expo in China next month and plan on giving away prizes. What are the tax issues we might face?
Hi, We are going to attend a expo in China next month and plan on giving away prizes including a $5,000 cash prize. Do you know if there are any tax/legal issues with doing an event like this outside the US? Thanks
Anytime you conduct business across borders there are any number of tax issues that can arise. In particular this takes place in dealing with Non-Resident Aliens whereby there are unique documentation, validation, reporting, and withholding rules. Here we can say that...
We Hired a Chinese Company. That Sent to the U.S. Two Employees on B-1 Visa. What tax documents do we need from them?
We are looking to hire a company based in China to do work for us here in the US. This company has sent 2 of their employees to the US on a B1 visa. We will be paying the company in China via wire transfer. What tax documents do we need from them and do we need to withhold 30%?
First off, you need to (and most importantly)...
Have your payee Chinese company complete a withholding certificate.
This will be a Form W-8. But which one?
Picking the correct form can get tricky.
But you have provided several important clues as to which W-8 in your question.
How do I determine a vendor as an International organization?
How do I determine a vendor as an International organization. A payment was made as a social contribution to another country, Lebanon. The name of the payee is the XXXX Society for Educational & Social Development. I may be over thinking this,but if this is considered an International organization there is no withholding, not sure about the reporting.
To document your payee properly you must...
I have a PR corporation that is offering services at our Puerto Rico plant. Is this 1042 reportable?
No matter how much I read about foerign payments made to US possessions I am still confused. My question: I have a PR corporation that is offering services at our Puerto Rico plant. Is this 1042 reportable?
My understanding is that companies incorporated in PR are considered foreign but individuals for tax purposes are considered US residents.
Puerto Rico has some tricky rules so let's run through the basics.
You will most definitely report a nonemployee service provider who is a U.S. citizen or U.S. company performing services in Puerto Rico, as U.S. residents are always subject to reporting.
We have payments made to Canadian National Railways for loads brought into the US by rail. Are these payments considered US source income?
We have payments made to Canadian National Railways for loads brought into the US by rail. Are these payments considered US source income?
Payments of U.S.-source income to non-U.S. persons are reportable on Form 1042-S and subject to 30% withholding.
The source of the income is determined by where the work is performed (see Publication 515 for more on sourcing).
When services being paid for are performed by a foreign vendor in the U.S., then you will report.