Quote:
Originally Posted by Jet Set Cat
I’m not sure about that because the law although extremely complex like everything else prepared by the IRS does seem to be pretty clear,
Publication 515 - Internal Revenue Service
Withholding of Tax
In most cases, a foreign person is subject to U.S. tax on its U.S. source income. Most types of U.S. source income received by a foreign person are subject to U.S. tax of 30%.
A reduced rate, including exemption, may apply if there is a tax treaty between the foreign person's country of residence and the United States. The tax is generally withheld (chapter 3 withholding) from the payment made to the foreign person.
MFC is big company that sends all kinds of money to foreigners and I doubt they would run the risk of being held liable for all those taxes, it would wipe them out.
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Your sniplet is about income from capital gains like dividends or interest payments. It does not apply to revenue flow or the size of the company.
Just look at the big company CCBill: they don't withhold 30% of payments to foreigners.
It's the model's responsibility to file her taxes in Spain. They are way higher than in the US, anyhow. She won't be able to duck that because most payments over 3000$ are reported to the revenue services in one way or another.