Freelance Contractor / Foreign Company / Taxes

Asked by: Trizzycube Rawat

The location where the independent contractor performs the services determines the source of the income. If the foreign contractor lives and delivers their services in the US, the income is US-sourced, and the company must withhold 30% as per non-resident tax rates.

How do I pay a contractor outside the US?

How to approach paying foreign contractors. There is no requirement for U.S. companies to file an IRS 1099 Form to pay a foreign contractor. But as noted above, the company should require the contractor file IRS Form W-8BEN, which formally certifies the worker’s foreign status.

What is foreign contractor tax?

Foreign contractor tax (FCT) is a specific kind of tax in Vietnam. The tax applies to foreign contractors, entities or individuals, who perform business activities and receive income in Vietnam.

Can a US company hire a Canadian independent contractor?

US companies can hire Canadians as either contractors or employees. For employers wanting to hire Canadian employees, you have two options: create a Canadian entity or engage a PEO. With a PEO, US companies can leave payroll, taxes, and compliance in the hands of experts.

Can a Canadian company hire a foreign contractor?

You must apply to them via the CRA. If you’re a small business, you can use the Section 105 waiver, which can be granted to foreign contractors that live in a country with whom Canada has a tax treaty.

Do I have to issue 1099 to foreign contractors?

Generally, no Form 1099 is required for payments to foreign contractors or services performed outside the US and no withholding is required (as long as the foreign contractor is not a US person and the services are wholly performed outside the U.S).

Do overseas contractors pay taxes?

When you work abroad as a contractor, you are generally subject to the tax jurisdiction of the foreign country in which you work, even if your paycheck comes from a U.S. client. In principle, you are also subject to U.S. tax jurisdiction if you are a U.S. citizen or lawful permanent resident.

What is CIT tax Vietnam?


Standard rates
The standard corporate income tax (CIT) rate is 20%. Enterprises operating in the oil and gas industry are subject to CIT rates ranging from 32% to 50%, depending on the location and specific project conditions.

Is Withholding Tax income tax?

Withholding is the amount of income tax your employer pays on your behalf from your paycheck. The changes to the tax law could affect your withholding.