02-19-2006, 10:48 AM
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 Re: General questions about tax treaty minli98[at]yahoo.com wrote: - quote - > I have a couple generic questions about how tax-treaty works:
The US Treasury has the funds withheld. Nonresidents should> 1. Let's say a foreign national opens a bank account in the > US. His country has a tax-treaty with the US such that only > 15% of his US-based income is withheld. Where does this > withheld money go to? I have heard that the bank sends it > to the IRS which then files it with the the foreign > government. But I have also heard a different version: that > the bank sends the withheld money to the IRS which then > keeps and does not send to the foreign government. Which is > right? file a W8-BEN with the bank. In addition, interest from a U.S. bank, savings and loan association, credit union, or similar institution, and from certain deposits with U.S. insurance companies, is tax exempt to a nonresident alien if it is not effectively connected with a U.S. trade or business. - quote - > 2. If the foreign country does not have with the US, then is
Start reading on page 17 of IRS Pub 519, US Tax Guide for> the foreign national's tax obligation (in the US) is limited > to the 30% withholding on income (and none on capital gain)? > Does he have to file any tax return? Aliens. It tells you how nonresident aliens are taxed and what is subject to the 30% rate and what is subject to progressive tax rates. http://www.irs.gov/publications/index.html << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== > |
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#-1
02-17-2006, 12:43 PM
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| General questions about tax treaty I have a couple generic questions about how tax-treaty works: 1. Let's say a foreign national opens a bank account in the US. His country has a tax-treaty with the US such that only 15% of his US-based income is withheld. Where does this withheld money go to? I have heard that the bank sends it to the IRS which then files it with the the foreign government. But I have also heard a different version: that the bank sends the withheld money to the IRS which then keeps and does not send to the foreign government. Which is right? 2. If the foreign country does not have with the US, then is the foreign national's tax obligation (in the US) is limited to the 30% withholding on income (and none on capital gain)? Does he have to file any tax return? Many thanks in advance. Regards, Min << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== > |
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| general, questions, tax, treaty |
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