I have a foreign government organization insisting on using a W-8BEN form in order to claim tax treaty benefits. Their fear is that the  US source income applicable will not be covered under section 892. They provided a clause that stated do no complete W-8EXP for such income not covered under section 892 but complete W-8BEN instead.

What is the rule with such a scenario?

I wanted to confirm the rules for when W8 forms expires. I know that a W8 without a US TIn# is good for the calendar year received plus 3 more years.

Is it also true if a US TIN# is given on the W8 form and the vendor is used consecutively and there are no reported company changes the W8 form is valid indefinitely?

Did the rules already change allowing us to accept W-8 Forms via email or fax? Thanks

I have a couple of quetions regarding the newly imposed FATCA regulations and I hope you can provided us some guidance on this topic.

Based on our limited readings on the new FATCA regulation, we notice that it highlights the reporting requirements for foreign financial institutions.  We are not sure of its applicability to us.

Currently, we have at least 17 foreign vendors in our Accounts Payable system.  These vendors are paid for goods and services such as reinsurance, consultancy, software application, training video, etc.  We need clarification on the applicability of the new FATCA regulation to State Fund by responding to the following questions:

• In general, what does Accounts Payable have to do to be FATCA-compliant?
• What is the FATCA implementation timeline? When does AP need to update procedures?
• Which AP payments are going to be exempt from FATCA 30% withholding?
• Which payments handled in AP are going to require new “due diligence” procedures and possible 30% FATCA withholding?
• How do we identify procedural areas which require updating for FATCA compliance?
• When will the IRS issue new Forms W-8 and when do we have to switch over to using the new W-8s?
• If a foreign vendor provides online web training but not physically being here in the U.S., is 1042-S reporting still required?
• If a foreign vendor submits a completed Form W8, does it mean that they’re exempt from the 30% withholding?  If not, how do we decide whether the 30% withholding requirement should apply to them or not?

Thank you.

Do FATCA requirements impact payments we make to foreign vendors using our P-card? Will we need to obtain W-8 forms for foreign vendors paid using the P-card? What are the consequences if we make a P-card payment and we have not obtained the W-8?

I work for a title insurance company.  I have a settlement being paid to a Canadian national.  The settlement is for reimbursements of expenses he paid to make his title whole against a fraudulent interest presented by an adverse party.  But he is collecting all the fees he paid to do this against his title insurance policy.  He has provided a W8, but has not included a US tax ID#.

1) My understanding of the form W8 is that without providing his US tax ID#, the Canadian tax treaty benefits cannot be applied.  Is this correct?

2) Since this is a reimbursement, is there still withholding?  My guess is yes because the IRS will consider this a settlement claim rather than a reimbursement.  If withholding is necessary, at what rate?

3) If a US tax ID# is included on a new W8, is withholding still necessary?  If so, at what rate?

I work for a  Title Insurance company.  We are in negotiations with a foreign software company to develop and maintain a custom software.  The foreign company is a national of a non-treaty country.  The software being developed will solely be owned by my company (my company has decided to treat this as services rather than royalties as we own the product). 

Using hypotheticals: The project will be expensive, consisting of hundreds of hours of development time, as well as other items.  All the development and maintenance will be done by the foreign nationals in their own country.

Now, my company is anticipating the need to bring a few of the foreign nationals to the US:  Business analysts to spec and price the project;  Project managers to determine exactly what is required to meet the various benchmarks;  Developers to demonstrate the best installation practices for the software as it is developed.  No programming or maintenance will be done on US soil.

What would be my company's reporting and withholding obligation, keeping in mind that the work done on US soil is a tiny fragment of the overall project cost (less than 1%), with the following caveats? 

1) If my company pays a constant amount on a monthly basis that encompasses payment for all work being done on the project, in this case would the whole amount paid be subject to reporting and withholding or only the percentage that constitutes the work done on US soil?

2) If the particlar services (US vs non-US) were portioned out and paid separately, would that make a difference?

3) If the software company agrees to payment by credit card, would that change my company's reporting and withholding obligation?

4) Just out of curiousity (and it may be out of your scope of practice), what happens with the 30% withheld in foreign reporting?  Does the foreign company have any recourse to collect it?  If the foreign company has a US branch  that is set up as a corporation with a US Tax ID, does this get applied against the taxes due from the US branch?

I reviewed the responses to several questions posed on the site regarding nonemployee compensation for individuals in Puerto Rico. I understand the distinction for a US person vs non-US person (for services performed in the US). However, I'm not clear on when the 480.6B to the Govt of Puerto Rico should be filed vs the 1099-MISC to the IRS. Or should they both be filed if they are a US person and reside in Puerto Rico?

We made a settlement payment to a foreign entity.  It was payment for a cancelled R&D service contract. 

Is there 1042s reporting required?

What are the 1099 reporting requirements to a Canadian vendor?