Withholding Obligations for Nonresident Aliens: ECI, FDAP, FIRPTA Reporting Requirements and Treaty Relief

This webinar will provide foreign tax advisers with a practical forms-driven roadmap of the diverse U.S. withholding requirements applicable to nonresident aliens (NRAs). Our panel of experienced international tax professionals will cover identifying income subject to withholding, relative withholding rates, and the requirements for depositing and reporting U.S. tax withholding on payments to NRAs.

Numerous determinations must be made to comply with U.S. withholding requirements for foreign taxpayers. Statutory withholding rates vary by type of income, and U.S. income tax treaties with specific countries often offer reduced withholding rates. Taxpayers who qualify for treaty relief must file Form W-8BEN to benefit. 

Generally speaking, the sale of a USRPI (U.S. Real Property Interest) is subject to withholding at 15% under IRC Section 1445. Buyers are required to collect and remit the tax via Form 8288 U.S. Withholding Tax Return for Certain Dispositions by Foreign Persons. However, certain sellers can qualify for lower rates (10% or 0%). For example, eligible sellers can apply for a withholding certificate to reduce or eliminate the withholding tax. Form 8288-B, U.S. Application for Withholding Certificate for Dispositions by Foreign Persons of U.S. Real Property Interests, provides this relief. Understanding the application of the statutory withholding rates and available options to mitigate the withholding burden is critical for international tax professionals and NRAs.

Listen as our panel of veteran foreign tax advisers explains NRA withholding rules, including classifying income, applying the correct statutory or treaty rate, and the information reporting requirements for NRAs.