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30% Withholding on Foreign Vendor Payments: When Is It Required for Parts Purchases?
February 4, 2026
Q. If we use a foreign vendor for purchasing parts, and they do not have a tax treaty listed on their W-8, do we withhold 30% of payment for the parts? Or is the withholding only for items we have to file for?
A.
(Answered by IOFM's third-party tax expert)
You only need to withhold taxes (or do Form 1042-S reporting in general) if it’s a reportable payment. Purchasing parts or supplies is not a reportable transaction, so there is nothing to do here. No reporting and no withholding…
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