Page 37 - International Taxation IRS Training Guides
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Inbound Overview








              Foreign Persons   are subject to U.S.  tax on:


                    •	  Gross  U.S.-source fixed, determinable, annual, or  periodic




                         income (“FDAP”)  via 30% withholding tax.
                            −  U.S.-source dividends,
                                                                    interest, rents, royalties, etc.


                    •	  The amount of income that is  effectively connected with a







                         U.S. trade or  business  , net of allocable deductions,

                         (“effectively connected income“  or  “ECI“  of a “USTB”)  is

                         taxable at graduated rates.




                    •	  Non-FDAP & non-ECI, even  if U.S.-source, is  NOT taxed.



              Treaty may reduce withholding rates on FDAP and
                   limit  taxable ECI to income that is  attributable to a

                   permanent  establishment  (PE) in the U.S.






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