Hi and welcome to our site!Several issues...1.You are a withholding agent if you are a US or foreign person that has control, receipt, custody, disposal, or payment of any item of income of a foreign person that is subject to withholding. A withholding agent may be an individual, corporation, partnership, trust, association, nominee, or any other entities.As a withholding agent, you are personally liable for any tax required to be withheld. This liability is independent of the tax liability of the foreign person to whom the payment is made. If you fail to withhold and the foreign payee fails to satisfy its U.S. tax liability, then both you and the foreign person are liable for tax, as well as interest and any applicable penalties.You are required to report payments subject to NRA withholding on Form 1042-S and to file a tax return on Form 1042.2.Nonresident alien (NRA) withholding applies only to payments made to a payee that is a foreign person. In most cases, the payee is the person to whom you make the payment, regardless of whether that person is the beneficial owner of the income. However, there are situations in which the payee is a person other than the one to whom you actually make a payment. Usually, you determine the payee's status as a U.S. or foreign person based on the documentation that person provides.3.Withholding requirements from payments to nonresident aliens (NRA) is a very complex area.For your own determination - you may refer to this publication -
www.irs.gov/pub/irs-pdf/p515.pdf4.Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. This form is used by a foreign person to:--Establish foreign status;
--Claim that such person is the beneficial owner of the income for which the form is being furnished or a partner in a partnership subject to section 1446 withholding; and
--If applicable, claim a reduced rate of, or exemption from, withholding under an income tax treaty.
Form W-8BEN also may be used to claim that the foreign person is exempt from Form 1099 reporting and backup withholding for income that is not subject to NRA withholding.
5.The tax law doesn't required to issue invoices - but the tax law requires to keep documentary evidences related to transactions - and invoices are widely accepted as supporting documents for tax purposes. So it is recommended to issue invoices.
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