Employing foreign developers & tax witholding

How much tax to withold for a non-resident alien

[phaze]

We are a California C corporation and have employed a South African based non-resident alien on a contractual basis to do some work for us. I'm trying to figure out what percentage of the payment I need to withold. I'm wading through IRS's publication 515 which is a guide to exactly this. You can find it here:
[irs.gov...]

According to this document:
"You may apply a reduced rate of witholding to a foreign person that provides form W-8BEN claiming a reduced rate of witholding under an income tax treaty only if the person provides a US TIN and certifies that....."

Does this mean I have to withold 30% of all income if any of our foreign contractors don't have a US taxpayer ID? I think the only way to get an individual taxpayer ID (ITIN) is to actually visit the USA.

Any advice is appreciated,

Mark.

[viggen]

I think the only way to get an individual taxpayer ID (ITIN) is to actually visit the USA.

No, I am austrian, and i got my ITIN W7 form over the net, and send it snail mail to them. It took the IRS about 2 months to send me my ITIN, other then that no problems at all...
[irs.gov...]

cheers
viggen

[phaze]

On page 23 of the above doc:

Services performed outside the United States.

Compensation paid to a nonresident alien for services performed outside the United States is not considered wages and is not subject to witholding.

I think I'll phone the IRS just to make sure.

[phaze]

Thanks for the reply Viggen. Were you based in the USA when you did the work that caused you to require an ITIN?

ps: It's labor day today, so I suspect the americans are going to be scarce around here today.

[viggen]

Thanks for the reply Viggen. Were you based in the USA when you did the work that caused you to require an ITIN?

I started with two friends in the US a company (LLC) and without an ITIN i was told i won't get my share paid out...
... and no i haven't been in the US in the last 10 years...

cheers
viggen