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1042 withholding on royalty payments
November 21, 2024
Q. We have a vendor that we have a royalty agreement with (use of trademark on product). In reading the treaty it looks like we would be required to withhold only 10%. Is this correct?
A.
(Answered by IOFM's third-party tax experts)
If the vendor has presented you with a valid withholding certificate (such as a Form W-8BEN-E if the vendor is a foreign entity) that includes a properly completed claim for reduced withholding on U.S.-source income under a valid tax treaty claim, then you can apply…
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