PRIMARY CONTACT: Mary D. Richter CPA
Payments to all foreign persons, including nonresident alien individuals, foreignentities,and governments, may be subject to NRAwithholding.Generally, a foreign person is subject to U.S. tax on its U.S. source income. Most types of U.S. source income received by a foreign person are subject to U.S. tax of 30%, unless areduced rate, including exemption, applies.
FATCA isset of rulesdesigned toassistthe IRS in collecting taxes owed byforeign personsthat receive payments from U.S. businesses.It impacts nearly all non-U.S. entities that receive most types of U.S. source income.Failure to comply with FATCA withholding regulations can result in increased tax liability,penalties,and fines for non-compliance.
Under FATCA, your foreign payees are likely to be subject to the 30% withholding tax.Withholdablepayments commonly include U.S. source dividends, rents, interest, royalties, salaries, wages, annuities or other fixed, determinable, annual or periodic income; gross proceeds from the sale or disposition of U.S. property that could produce interest or dividends; or interest paid by a foreign branch of a U.S. bank.
Schneider Downs’ professionals can assist in:
About Schneider Downs Tax Advisors
With one of the largest regional tax practices in the country, Schneider Downs Tax Advisors’ personal focus on clients and in-depth understanding of current issues ensures that clients are complying with tax filing requirements and maximizing tax benefits. Our industry knowledge and focus ensures delivery of technical tax strategies which can be implemented as practical business initiatives. Learn more at www.schneiderdowns.com/tax-services.
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