Foreign vendors would most commonly use the following forms:
- Form W-8BEN: Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals). This form is used by foreign individuals to certify their foreign status and claim any applicable treaty benefits to reduce or eliminate U.S. withholding tax on income.
- Form W-8BEN-E: Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities). This form is used by foreign entities to certify their foreign status, document their chapter 4 status for FATCA purposes, and claim any applicable treaty benefits to reduce or eliminate U.S. withholding tax on income.
- Form 1042-S: Foreign Person’s U.S. Source Income Subject to Withholding. This form is used to report income paid to foreign persons and the amount of tax withheld on that income. It is filed by the withholding agent (e.g., the tribal gaming operation) and provided to the foreign vendor.
- Form 1042: Annual Withholding Tax Return for U.S. Source Income of Foreign Persons. This form is used by withholding agents to report the total amount of income paid to foreign persons and the total amount of tax withheld during the year.
These forms ensure that the appropriate amount of U.S. tax is withheld from payments to foreign vendors and that the vendors can claim any applicable treaty benefits to reduce their tax liability.
Sources:
Instructions for Form 1042 (2023)
Instructions for Form 1042-S (2024)
Publication 515 (2024)
IRM Part 4. Examining Process. Chapter 10. Examination of Returns. Section 21. U.S. Withholding Agent Examinations - Form 1042
IRM Part 3. Submission Processing. Chapter 21. International Returns and Documents Analysis. Section 110. Processing Form 1042 Withholding Returns
IRM Part 21. Customer Account Services. Chapter 8. International. Section 1. IMF International Adjustments
Publication 3908 (9/2019)
