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How do I pay a foreign company a fee and be able to send them a 1099 so they incur the proceeds for tax?

Los Angeles, CA |

I am paying a company in China referral fees from real estate commission proceeds I receive here in California. I am wondering how do I give the company a 1099 because on the 1099 it request a social security number or tax id number. What can I do? Is there a different form you file other than a 1099 when you are paying a foreign non-resident person/business? Or how does that work? Does the company from China get a code from their government or ours as an id for this to track the money earned at the end of the year?

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Attorney answers 3

Posted

Form 1042 is proper form and you will need to withhold taxes form the payment. See attached IRS publication which is on point to your issue as to what to do and file, etc.
http://www.irs.gov/Businesses/U.S.-Tax-Withholding-on-Payments-to-Foreign-Persons

My answer is not intended to be giving legal advice and this topic can be a complex area where the advice of a licensed attorney in your State should be obtained.

Posted

Mr. Corrigan has given you a superb answer.

Posted

You should engage an experienced CPA or accountant to assist you in filling out Form 1042-S since it can be somewhat confusing, especially the income codes.

This response shall neither be deemed to create an attorney-client relationship nor constitute legal advice but rather is intended to provide general information about a complex legal issue.