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Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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According to FATCA, a 30% withholding is possible for certain

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According to FATCA, a 30% withholding is possible for certain kinds of payments if FATCA rules are not observed. Doesn't this come into conflict with International Tax Treaties regarding FDAP income that allows lower percentages of withholding or even zero withholding?


Hi and welcome to Just Answer!
International Tax Treaties override the tax laws. If a specific Tax Treaty allows lower withholding or eliminates withholding - that will be in effect. So there is no conflict. There are special procedures to claim tax treaty benefits. Generally – the taxpayer will provide signed form W8BEN to the payer as a way to claim tax treaty benefits.


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