Foreign U.S.Steel Tax Procedure - www.ussteel.com
Foreign (Non-U.S.) Vendors
United States Steel Corporation Tax Procedure for Payment to Foreign Vendors
In accordance with the Internal Revenue Code and Treasury Regulations, vendors who are foreign nationals or foreign entities will need to complete one of the versions of IRS Form W-8 series or an IRS Form 8233 in order for United States Steel Corporation to make payment for goods or services rendered. The documentary requirements vary depending on the nature and location of the goods and services.
1) Payment for Services Provided in the U.S.
All foreign vendors receiving payments for services performed in the U.S. are required to execute an IRS Form W-8 (W-8BEN, W-8ECI, W-8EXP, W-8IMY) or an IRS Form 8233. If the U.S. does not have a tax treaty with the foreign vendor’s country of residence that exempts or reduces the rate of U. S. federal income tax withholding on such payments, or if Form W-8 or 8233 does not contain a U.S. taxpayer ID and has therefore not been correctly completed before payment is processed, 30 percent of the total payment to the foreign vendor will be automatically withheld by United States Steel Corporation and remitted to the IRS on the vendor’s behalf.
A list of existing tax treaties between the U.S. and other countries is found in IRS Publication 901, U.S. Tax Treaties, available online here.
If the contract is for purchase of tangible personal property, and if embedded services are included in the purchase of this property, those services must be valued separately and are subject to the requirements of this section (i.e. treaty benefits must be claimed and the W-8 or 8233 must contain a valid U.S. taxpayer ID). An example of an embedded service might include the purchase of equipment for use in the U.S. where the vendor’s engineers assist with installation at our U.S. plants.
In order to be valid for tax treaty exemption, both the Form W-8 and Form 8233 (for individuals) require a U.S. taxpayer identification number. Instructions for obtaining a U.S. taxpayer ID are set forth herein.
We cannot accept faxed or e-mail copies of the IRS Form W-8 or IRS Form 8233. We must have the signed original for our records according to IRS regulations.
2) Payment for Services Provided Outside of the U.S. or Payment for Purchase of Tangible Personal Property
For foreign vendors providing either services outside the U.S. or providing tangible personal property (goods) to United States Steel Corporation, the W-8 BEN must still be completed, however, no treaty benefits need to be claimed and there is no need for a U.S. taxpayer ID. United States Steel requests that every foreign vendor fill out the W-8 to confirm two things: i) that they are a foreign vendor not subject to U.S. tax reporting and/or backup withholding, and ii) that United States Steel Corporation conducted the necessary step of confirming the foreign status of the vendor. For this purpose, the foreign vendor need only complete Part 1, lines 1-4, and sign and date the bottom of the form. The form must be filled out and signed by an employee/officer/director of the company who is authorized to sign. It ensures that we verified that the company is truly a foreign entity and not subject to withholding. This form is kept in our internal files and provides us with a record that we did meet the requirements of the law by verifying the foreign status of the company.
* 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.