Payment to foreigner

[jmc]

When a US corp. make payment to foreigner in Korea for services rendered, what kind of form or document is required to keep or reported? Any withholdings? What section of Pub. to find out the details?

[Roland Slugg]

30%

Generally, 30% (or a lower amount by treaty) must be withheld at the source. The tax is reported to the IRS on forms 1042/1042-S. See Code §1441, §1442 and related Regs.

[ED SMITH]

None

If he were a non-resident alien, 1042, etc would apply, but it is a person in a foreign country who would be subject to Korean taxes not US.

[jmc]

Thanks for clarification, Ed.