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Compliance Clarification on Foreign Vendor's Software
December 11, 2025
Q. We are purchasing subscription fees or right to access and use a foreign vendor's software. This foreign vendor has data centers located in San Francisco. Would this confirm that this vendor would be subject to foreign reporting on Form 1042-S? The vendor provided Form W-8BEN-E.
A.
(Answered by IOFM's third-party tax expert)
Sourcing rules on cloud transactions are complex. The Treasury Department issued final regulations (1.861-18) in January, and proposed regulations (not final…
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