We run an international competition that takes place in a different country every two years and each time we have to learn new lessons around taxation. What is the Withholding Tax situation around jury services or the teaching of master classes for non-US resident jury members? Are they also subject to the 30% Nonresident Alien (NRA) Withholding Tax or not?<\/em><\/p>\n As anyone in the U.S. who does business internationally will discover, dealing with tax withholding and other tax laws in foreign countries can be a drag, to say the least.\u00a0 Every country has its own rules and procedures, and it\u2019s often difficult to figure out those rules ahead of time, especially if you don\u2019t speak the language.\u00a0 I feel your pain!<\/p>\n As for the U.S. requirements for NRA tax withholding, the general rule is that any time a payment is made to a nonresident individual or business for services provided in the U.S., the 30% NRA withholding rule applies (i.e., you must withhold 30% of the gross payment toward the NRA\u2019s possible tax liability.)\u00a0 This rule applies not only to performers, but to ANYONE performing services in the U.S. \u2013 including those serving on competition juries and teaching master classes.<\/p>\n There may be an exemption from U.S. tax and withholding for a nonresident, however, if the nonresident meets certain requirements.\u00a0 Generally, those requirements are as follows:<\/p>\n Whether or not a nonresident qualifies for a treaty exemption is very fact-specific.\u00a0 And it\u2019s important to be aware that each treaty is different!\u00a0 Just because the U.S. tax treaty with France might exempt a French individual from tax for performing as a juror at a U.S. competition under certain circumstances doesn\u2019t mean that the U.S. treaty with the U.K. would provide the identical exemption.<\/p>\n Fortunately, the IRS publishes a guide to understanding tax treaties, which goes by the catchy title of \u201cPublication 901 \u2013 U.S. Tax Treaties.\u201d\u00a0 (You can download this publication here: http:\/\/www.irs.gov\/pub\/irs-pdf\/p901.pdf<\/a>.)\u00a0 Table 2, which begins on page 39 of the current version of Pub. 901, includes a summary of the rules that apply to nonresident individuals<\/em> who are performing services in the U.S., country by country.\u00a0 When using this Table, be sure to review all of the information relevant to a particular country, including the footnotes!\u00a0 (It\u2019s all relevant to whether or not a withholding exemption applies.)<\/p>\n Finally, remember that a nonresident individual wishing to claim an exemption from withholding MUST have either a Social Security Number (SSN) or a U.S. Individual Tax Identification Number (ITIN) to do so.<\/p>\n And, as always, if you have any questions about visas or taxes for nonresidents working in the U.S., be sure to check out the Artists from Abroad website (www.artistsfromabroad.org<\/a>) which has all of the information you could ever need on these topics!<\/p>\n ________________________________________________________________<\/p>\n For additional information and resources on this and other \n
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<\/a>legal and business issues for the performing arts, visit ggartslaw.com<\/a><\/p>\n