Originally Posted by muneeb
1. Do the Us Head office of Company B withhold tax if it made payment to Company A. , keeping in view that entire work was performed in Norway by Norway Inter-Company of Company A?
2. If the tax will be applicable then what will be the rate of tax on performing services and will also appreciate your providing the section of US tax law, If liable to be withheld?
#1;I guess it depends; aslongas co A is a non US co overseas(no presence in US), co B doesn’t w/h tax.unless service done by co A was done in US, no w/h required by co A.non us biz is not subject to tax to IRS unless it earns taxable income in US by doing biz in service.Co A does NOT file a W8-BEN as there is no beneficial interest in the US income. W8-BEN is ONLY used where there is a beneficial interest, such as when the foreign taxpayer has an ownership interest in the US company or performs services in the US.So Co B does not withhold taxes on the payments to A or submit any tax forms relative to the payments.Co B ,the payer, does keep a record of Co A's foreign address. Ideally Co B should also request a statement from co A that they are a foreign entity and not subject to US taxation.
#2;asmentioned above.As long as th eservcie was done inUS/ Co A was located in Us, then Co B must w/ h tax at 30% I GUESS