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Old 08-31-2016, 07:46 AM
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Question computer software license - 30% tax

I manage a Canadian corporation which resells non-exclusive computer software licenses on USB keys to US corporations and purchases these USB keys for resale from a Hong-Kong corporation with no place of business in the US or Canada. These licenses are similar to shrink-wrap licenses. Are these purchases by US residents subject to 30% withholding taxes in the US?
If they are, should a person that makes a payment of U.S. source income to my Canadian corporation withhold the proper amount of tax, report the payment on Form 1042-S and file a Form 1042 by March 15 of the year following the payment(s). Should the US purchasers be filing such forms even if they do not have to withhold taxes? Should we be providing them with Form W-8BEN?
Thanks
notaguru



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