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Reporting payments for images licensed from a non-U.S. source
November 27, 2023
Q. If we're paying for a license to use images from a UK supplier that hasn't claimed a treaty on their W-8, would we need to withhold 30% or only report on the 1042?
A.
(Answered by IOFM's third-party tax experts)
If the images are to for use here in the U.S., the payment is U.S.-source income which is subject to the 30% statutory rate of withholding, and the gross income amount and withheld tax amount are reported to the IRS on Form 1042-S.
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