Are there any AP standard procedures for making payments to foreign consultants who come to the U.S. as guest speakers? What type of forms and documentation requests do you include in your New Vendor Packet?

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If your organization brings in a guest from another country to speak in the U.S., payments to that individual will generally be subject to 30 percent withholding because it is U.S. source income.

The speaker should provide your organization a completed form W8-BEN. The purpose of the document is to provide clear documentation of the speaker's non-U.S. status. Important information that must be reported on the W8 includes the speaker's name, their permanent address, and their Taxpayer ID Number. All foreign persons working in the U.S. must obtain a Taxpayer ID.

However, according to IRS Information Reporting Service Agent Ms. Flowers (ID# 28-10214), if the speaker's country has a treaty with the U.S. granting reduced or eliminated tax obligations, the speaker must fill out a form 8233 to claim that exemption.

Payees must file a Form 8233 when performing dependent or independent personal services (such as speaking at a school or other function) and claiming a treaty exemption. Filing a form 8233 forfeits the requirement to file a form W8.

Visit the following link to determine if your speaker's county has a tax treaty with the U.S.: United States Income Tax Treaties - A to Z

To ensure that you have all the information you need, make sure to provide the speaker with a new vendor packet. TAPN has a sample Vendor Welcome Letter and New Vendor Information Form that includes important information you should have on file for all payees, domestic or foreign. The following templates may be tailored to your specific situation:

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