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Classification of eBook Subscription Payments to Foreign Payees
February 13, 2026
Q. Considering the recent changes in Treasury regulations regarding cloud transactions and digital content, how would a payment for access to online (eBook) textbooks be classified to a foreign payee? Specifically, we are paying for a subscription for access to a set of textbooks for the calendar year; at the end of the year, to continue the access, we will pay an additional fee.
A.
(Answered by IOFM’s third-party tax expert)
The determination of this type of payment (whether made to a foreign…
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