Page 8 - U.S, International Taxation Inbound - Outbound Transactions_Neat

Inbound Transactions

(continued)

• Exemptions:
• Exempt interest
• Interest on bank deposits received by a foreign person
is not subject to withholding in the U.S.; and also
• Portfolio interest on registered or bearer debt IRC. Secs.
871(h) and 881(c). When debt is in registered form,
interest is payable only to the record owner who must
provide a W-8 to the payor to prove he or her is a
foreign person.
• Exempt dividends
• Dividends paid by certain domestic corporations
that receive more than 80% of their income from active
foreign businesses are exempt from the 30% tax. If the
dividends are not effectively connected with the conduct of
a trade or business in the U.S. by the foreign person they are
exempt from any tax in the U.S.
• Services
• Salaries, wages, compensations, remunerations and
emoluments from U.S. sources that are effectively
connected with the conduct of a trade or business are
exempt from the 30% withholding.
• Rents
• U.S. source rents paid to a foreign person that are
effectively connected with the conduct of a trade or
business in the U.S. are exempt from the 30% withholding.