1042-S Reporting

Since July 1, 2016 FATCA exemption status has been required from all subject accounts including those that were pre-existing, i.e. those in place prior to January 1, 2015, which were excepted from certain requirements during the transition period. 2014 and 2015 were considered a transition period as far as IRS enforcement of the FATCA… Read More

Payments made to non-U.S. persons have a separate set of reporting obligations, which differ from the 1099 reporting requirements for U.S. persons. While accounts payable departments are generally familiar with 1099 reporting, reporting payments to non-U.S payees is a source of confusion for many. With many organizations involved in global business relationships, having knowledge… Read More

Determining when to withhold and report payments to non-U.S. persons can feel a lot like navigating a minefield. One misstep can mean the difference between exempting payments from withholding and finding yourself financially liable for the 30 percent you should have withheld. Ensuring you withhold and report correctly means knowing how to identify whether… Read More

FFIs and NFFEs Withholding on Payments Changes to W-8 New Form W-9 FATCA Withholdable Payments FATCA Timeline One of the most confusing compliance issues for U.S. accounts payable departments has gotten more complicated. Starting back in 2014 (with deadlines extending out for several years), the rules for certifying and withholding on payments to foreign… Read More

Few things can ruin an accounts payable professional's day more than information returns. Things start getting especially interesting when dealing with foreign payees. You have to consider whether the payment was U.S. or foreign source, whether a tax treaty exists with the payee's country, and whether the treaty covers the specific payment type. Answering… Read More

Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals), is used to establish that the recipient of certain types of income, including nonemployee compensation, is not a U.S. citizen, to claim that the recipient is the beneficial owner of the income for which the form is… Read More

What do accounts payable departments and diplomats have in common? They both benefit from understanding treaties. The United States has tax treaties with dozens of countries. When AP pays a resident from one of these countries for services performed inside the U.S., the treaties either grant the recipient a reduced income tax withholding rate… Read More

If you pay a U.S. person for nonemployee services, you report on a 1099-MISC. If you pay a foreign person for the same services performed inside the U.S., you report on a 1042-S. Most accounts payable departments have a clear understanding of this distinction. However, what happens when your contractor is from a U.S.… Read More

When starting to do business with a vendor that appears to be based in another country, such as the United Kingdom, it’s natural to have some questions—such as which taxpayer identification number (TIN) form you should request from the vendor, what other documents are required for IRS reporting, and how you should deal with… Read More

Reporting foreign payments to the IRS can be a headache even if you have all the correct documentation. Determining how much to withhold – or if you should withhold at all – does not always come easy. However, what happens if you do not have documents certifying that the vendor is foreign? It is… Read More

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