{"id":684,"date":"2019-10-19T04:22:59","date_gmt":"2019-10-19T04:22:59","guid":{"rendered":"https:\/\/oandgaccounting.com\/staging\/?p=684"},"modified":"2023-02-24T07:21:39","modified_gmt":"2023-02-24T07:21:39","slug":"u-s-entities-out-sourcing-contractor-payments-to-foreign-contractors","status":"publish","type":"post","link":"https:\/\/oandgaccounting.com\/staging\/u-s-entities-out-sourcing-contractor-payments-to-foreign-contractors\/","title":{"rendered":"U.S Entities Out-Sourcing Payments to Off-Shore Contractors – Tax Implication"},"content":{"rendered":"

If a US entity pays a foreign Contractor for services performed, the US entity claim the foreign contractor payments and deduct them as legitimate expenses on their U.S books and tax return.<\/p>\n

According to the IRS Publication 515<\/strong><\/a>, The US would not tax non-residents on income derived from personal services that are performed outside the US. This would also mean that the income will be a foreign source income and withholding would not be required.<\/p>\n

US entities can hire offshore employees at anytime. Offshore employees would not have US tax withholding or tax reporting if the employee would be performing the services outside the US.<\/p>\n

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