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Documentation

Generally, you must withhold 30% from the gross amount paid to a foreign payee unless you can reliably associate the payment with valid documentation that establishes either of the following:

  • The payee is a U.S. person,
  • The payee is a foreign person that is the beneficial owner of the income and is entitled to a reduced rate of withholding.

Generally, you must obtain the documentation before you make the payment. The documentation is not valid if you know, or have reason to know, that it is unreliable or incorrect. See Standards of Knowledge.

If you cannot reliably associate a payment with valid documentation, you must use the presumption rules. For example, if you do not have documentation or you cannot determine the portion of a payment that is allocable to specific documentation, you must use the presumption rules.

Other situations exist which provide for exceptions from withholding depending upon complex facts and circumstances. These also require valid documentation. The following describe the specific types of documentation.

References/Related Topics

Page Last Reviewed or Updated: 13-Feb-2014