International Payments
 
Invoicing Requirements
US Tax W/H Policy
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Commonly Used Forms

INTERNATIONAL PAYMENTS - TAX FORMS FOR NON US SUPPLIERS

Payments to non US persons (a nonresident alien individual, foreign corporation, foreign partnership, foreign trust, foreign estate and any other person that is not a U.S. person) must be made in accordance with Internal Revenue Service (IRS) regulations on foreign payments. In accordance with the IRS guidelines, vendors who are non US nationals or non US entities are required to complete one of the versions of IRS Form W-8 series or an IRS Form 8233 in order for payers to verify information. Booz Allen Hamilton uses information provided on the form to create a vendor number to initiate the procurement and payment processes.


Payment for Services Performed in the United States

All non US vendors receiving payments for services performed in the U.S. are required to complete one of the IRS Forms W-8 (W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, W-8IMY) or an IRS Form 8233. If there is no tax treaty between the United States and the non US vendor's country of residence that exempts or reduces the rate of U. S. federal income tax withholding on such payments, or if Form W-8 or 8233 does not contain required information such as a U.S. taxpayer ID, 30% of the total payment to such a vendor will be automatically withheld and remitted to the IRS on the vendor's behalf. A list of existing tax treaties between the U.S. and other countries are found in IRS Publication 901, U.S. Tax Treaties.


Payment for Services provided outside the U.S or Payment for Tangible Goods

Booz Allen Hamilton requires non US vendors performing services or supplying tangible goods outside the United States to complete the W-BEN form. Even though non US vendors providing services outside the United States cannot claim treaty benefits, a completed W-8BEN form is necessary to confirm that the vendor is non US and consequently not subject to U.S. tax reporting and back up withholding requirements.


Choosing the Appropriate W-8 FORM

The appropriate Form W-8 required from vendors is determined based on a number of factors including whether the form is being provided to solely establish the vendors's non US identity or the form supports a treaty-based claim for reduced withholding. Most of the information required on the W-8 forms is identifying information such as vendor name, location, and status. To provide a high level guidance on the forms a brief description of each of the W-8 forms and who should use them is provided below. For more information on these forms and other tax related resources, reference the IRS publication 515 or consult your tax department.


Different Types of W-8 Forms

Non US vendors are required to complete one of the IRS Forms W-8 (W-8BEN, W-BEN-E, W-8ECI, W-8EXP, W-8IMY) or an IRS Form 8233. Below is a brief overview of each form.

Form W8-BEN-E Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities)

This form is used by non US companies. Instructions on how to fill out the form are available here.

Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for U.S. Tax Withholding).

This is the most commonly used form by non US vendors. Non US payees providing services outside the U.S. use this form to establish non US status in Part I and certify in Part IV that they are not U.S. taxpayers. On the other hand, Non US payees providing services in the U.S. may use this form to exempt certain types of payments from the 30% federal income tax withholding required under U.S. tax law. For a valid tax treaty exemption, the vendor must provide a valid U.S. tax identification number and claim treaty benefits in Part II of the form. A list of existing tax treaties between the U.S. and other countries is found in the U.S. Tax Treaties IRS Publication 901. Instructions on how to fill out the form are available here


Form W-8ECI (Certificate of Foreign Person’s Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States).

Non US entities using this form must have a physical place of business within the United States. The payee must have a valid U.S. taxpayer ID and file yearly U.S. tax returns to report all income claimed to be effectively connected with a U.S. trade or business. Instructions on how to complete this form are available here.


Form W-8EXP (Certificate of Foreign Government or Other Foreign Organization for U.S. Tax Withholding). This form is used by non US tax-exempt organizations to claim and document their tax-exempt status under U.S. tax law. To claim exemption from U.S. tax withholding, non US tax-exempt organizations must provide documentation of their U.S. tax-exempt status. The Payer is required to withhold 30% of payment from payees who cannot verify their tax-exempt status. Instructions on how to complete the form are available here.


Form W-8IMY (Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for U.S. Tax Withholding).

This form is used for reporting payments to "flow-through entities" such as non US partnerships, intermediaries and U.S. branches of non US banks. Instructions on how to complete the form are available here. The form is valid until circumstances change.


Form 8233 (Exemption from Withholding on Compensation for Independent [and Certain Dependent] Personal Services of a Nonresident Alien individual).

This form is used by non US individuals or nonresident individuals to claim tax treaty exemption from withholding or a reduced withholding rate on some or all compensation paid for independent personal services (self-employment), dependent personal services and personal services income sourced from the United States. The exemption must be based on a tax treaty to which the United States is a party and the nonresident individual must have a valid U.S. tax identification number. The form must be sent to the IRS within three days of receipt and if the nonresident individual is not eligible for treaty benefits, the IRS will respond within 10 days. Reference Form 8233 instructions on how to fill the form.