Foreign vendors
New vendors must provide SPU with a completed W-8BEN for our records: https://www.irs.gov/pub/irs-pdf/fw8ben.pdf.
This is because the University is required to establish the tax status of foreign entities with which it conducts business. The W-8 submitted by a foreign entity indicates whether taxes need to be withheld when payments are processed.
Transactions that may trigger tax withholding include services performed in the US. A foreign entity from a country that has negotiated a tax treaty may be exempt from tax on certain types of transactions. If they are from a country with no treaty benefits, or the activity is not covered by the treaty, payment to the vendor is subject to 30% tax withholding. Probably delete - useful for departments? [revised to focus on 30% rate]
Foreign vendors are placed on a payment "hold" to ensure that all requests for payments are reviewed for compliance prior to payment being processed.
Each W-8 is reviewed for tax status determination, and each invoice submitted for payment is reviewed by Accounts Payable for taxable-type transactions.
Payments to foreign vendors are made via U.S dollar checks, and by electronic funds transfer in U.S. dollars or the foreign currency.
Form W-8 Ben
https://www.irs.gov/forms-pubs/about-form-w-8-ben
Payments to non-resident aliens
Any services performed by an independent nonresident alien (NRA) contractor, including honoraria paid by the University to visiting teachers, lecturers, and researchers are generally subject to 30% tax withholding from the payment (unless it is exempted by a tax treaty). Refer to Tax Treaties Table provided to view a list of countries with which the United States has a tax treaty in which NRA independent contractors may be able to exclude some or all of their income under the terms of a tax treaty entered into between the United States and their home country. [revised to focus on 30% rate].
Payments to non-resident aliens include any payments made to a visiting lecturer from overseas or a contractor who lives overseas.
In general, 30% withholding tax will be applied to any amount due to the non-resident alien. However, some countries have entered into a tax treaty with the U.S. If the non-resident alien wishes Do they do a W-8BEN-E