The Catholic University of America

  Payments to Foreign Nationals:

 

 

The Catholic University of America (CUA) uses both domestic and international companies/individuals for vendor services. There are specific tax rules related to payments to international companies and individuals.

Work or Services Performed Outside the USA:

If the company/individual is physically located outside the USA and all services provided are performed outside the USA, then it is considered foreign source income for the company/individuals and is non-taxable.

The vendor simply needs to complete the Non-US Vendor Certification Form (For Services performed Outside of the United States). 

Accounts Payable will hold completed Non-Vendor Certification Form. The vendor must complete a new form if any information changes.  

 

Work or Services Performed Inside the USA:

If the international company/individual provides services for CUA within the US there are reporting and possibly tax withholding requirements.

The vendor needs to complete the Foreign National Vendor Application for Services performed within the United States or Royalties paid from the United States to Foreign Entities. The vendor also needs to complete the appropriate Internal Revenue Service Form to claim the tax treaty benefit.

IRS Tax Forms in the W-8 Series (W-8BenW-8ECIW-8IMYW-8EXP) and Form 8233:

International vendors must submit a US withholding certificate (W-8 series of forms or 8233) with a Federal Employer Identification Number (FEIN), Individual Taxpayer Identification number (ITIN) or Social Security Number(SSN) in order to claim an exemption from or reduction in withholding.

Accounts Payable will hold all W-8 forms in a manner that is accessible for reference or audit.

Accounts Payable will make three copies of Forms 8233 received. Sign Form 8233 Part IV as Withholding Agent. Give one copy to the vendor; mail or fax one copy to the IRS within 5 days; keep the third copy for CUA records. Wait 10 calendar days after faxing or mailing copy to the IRS before making payment to ensure the IRS does not object to the Form 8233.