Withholding of Taxes on Payments to Foreign Persons and Entities

Lorman Education Services
Training overview
Professional Course
Self-paced Online
2 hours
From 199 USD
Start dates
Online
199 USD
Start anytime

Course description

Withholding of Taxes on Payments to Foreign Persons and Entities

Learn to navigate the myriad of W8s available for documenting a payee as a foreign person.

Most organizations have procedures in place to correctly and efficiently report certain payments to U.S. persons on Form 1099. However, far fewer organizations are as familiar with the process of reporting certain payments to foreign persons on Form 1042S. The complexity involved in reporting payments to foreign persons is far greater. While a U.S. person would provide the same W9 regardless of entity or payment type, a foreign person could provide one of several W8s (e.g., W8BEN, W8BENE, W8ECI) or even a Form 8233. In addition, the type of payments reportable may depend upon sourcing (foreign or U.S.), and the determination to withhold may depend upon an income tax treaty. Lack of adequate documentation and analysis can result in the payer of income being held liable for the 30 withholding tax in addition to penalties and interest. This course will help those responsible for payments to foreign persons navigate the myriad of W8s available for documenting a payee as a foreign person. In addition, the material will help identify the types of payments reportable on Form 1042S, including a broad overview of the sourcing rules which determine if a payment is a U.S. or foreign source. This course will also provide guidance on determining if the payee should withhold the payment and, if so, what is the proper withholding rate.

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Who should attend?

This live webinar is designed for accountants, tax managers, tax preparers, accounts payable professionals, CFOs, controllers, enrolled agents, business managers and owners, presidents, vice presidents, CEOs, operations managers, and consultants.

Training content

Imposition of Withholding on FDAP Income

  • 881 Discussion
  • Brief Discussion of 882 ECI and Differences From FDAP
  • 1441 and 1442 Discussion
  • Status of Income Recipient (Resident vs. Non-Resident; Individual vs. Entity, Substantial Presence Test)

Sourcing of FDAP Income

  • Interest
  • Dividends
  • Royalties
  • Compensation for Services
  • Other Income and Payments

Treaties

  • Requirements to Qualify and Residence
  • Beneficial Rates on FDAP Income
  • LOB Provisions

Special Rules for Partnership Withholding

  • General Withholding of FDAP Income
  • Lag Method Reporting Requirement (Distributive Share of FDAP Withholding When K-1 Provided vs. Due Date)
  • Withholding of ECI From Foreign Partners of Domestic Partnerships
  • Foreign Partnerships – Withholding Agent/Withholding Statement Issues
  • Forms 8804, 8805, and 8813

Forms (Generally)

  • 1042 and 1042-S
  • W-8 Forms
  • E-File Requirements

Penalties

  • Failure to File
  • Late Filing

Certification / Credits

Credits: Enrolled Agents ,IAPP ,CPE

Learning Objectives

  • You will be able to explain the implication of income tax treaties on US withholding.
  • You will be able to identify U.S. source payments that are subject to withholding.
  • You will be able to recognize reportable payments to foreign parties by U.S. companies.
  • You will be able to review forms 1042, 1042S, and W8.

About Lorman Education Services

Lorman Education Services - Live and On-Demand Courses

Lorman Education Services is a leading provider of online professional development and corporate training for organizations and individual professionals. For more than 30 years, Lorman has delivered relevant, high-quality, professional-level courses that cover a broad range of business and technical...


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Lorman Education Services

Lorman Education Services
2510 Alpine Road
54702 Eau Claire Wisconsin

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