Do I understand Publication 515 correctly that if a U.S. Corporation contracts with a nonresident alien web designer in a foreign country and the web designer does all of the design work while physically present in the foreign country, the income is foreign source income and is therefore not reportable to the IRS or subject to the 30% withholding?
Source of income for personal services depends on where services performed. Based on your description, it is performed outside the U.S. Foreign source income (non-U.S. source income) paid to a NRA is normally not subject to U.S. tax, and is exempt from NRA withholding under 1441(a).
Yes, that is right, but you need to get a Form W-8 Ben. The presumption is that unless you have evidence of foreign residency, it is US Source and you need to withhold.
3-Dec-2019 5:40pm
