U.S. Tax Policy for Payment to Foreign Vendors

 

The U.S. Internal Revenue Code and Treasury regulations require a mandatory 30% income tax withholding on payments made to foreign vendors who provide services in the U.S. unless the income from providing such service is exempt under a provision of a tax treaty between the foreign vendor’s home country and the U.S. To avoid withholding, foreign vendors that are business entities must have a U.S. employer identification number (EIN) and must submit a properly completed IRS Form W-8BEN, W-8ECI, W-8EXP, or W-8IMY to United States Steel Corporation prior to receiving payment for such services. Foreign vendors that are individuals who wish to avoid withholding must be eligible to claim a tax treaty exemption by having a social security number (SSN) or individual taxpayer identification number (ITIN) and must submit a completed IRS Form 8233 to United States Steel Corporation prior to providing such service.

If a foreign vendor performs services in the U.S. and does not provide the proper support for an exemption, United States Steel Corporation will withhold the appropriate taxes and report such taxes annually on IRS Form 1042-S (Foreign Person’s U.S. Source Income Subject to Withholding). Reporting is required regardless of whether or not withholding is required. A copy of the Form 1042-S is sent to the foreign vendor at the time it is filed with the IRS.

Please see the following IRS sites and publications for additional information on withholding on payments to foreign entities:
 

U.S. Withholding Agent Frequently Asked Questions

General Information for the International Taxpayer

* United States Steel Corporation has created this policy to comply with certain U.S. Treasury regulations. United States Steel Corporation, its subsidiaries, affiliates and employees do not provide tax advice, and any information contained herein is not intended or written to be used as such. All vendors should consult with their tax advisors regarding these matters.