Foreign Vendor Payments (Individuals and Companies)
Due to the complexity of laws and regulations regarding payments to foreign vendors, it is imperative that you contact our Payroll Coordinator at 704-894-2461 or our Accounts Payable Coordinator at 704-894-2206 as soon as you are aware that you will be paying a non-U.S. vendor, even for reimbursement of expenses. These regulations apply to Davidson students as well as external vendors.
In order to process a payment to a foreign vendor, whether it is an honorarium, a scholarship, or reimbursement of travel costs, the College requires certain information. All non-U.S. individuals should complete a foreign national information form; all non-U.S. corporations should complete form W-8BENE. The information on these forms will help us to determine whether payment is legal and taxable, and if so, which IRS forms must be completed.
Please be aware that if we are making a payment to a U.S. person, but we know this person is receiving the payment as an agent of a foreign person, we must treat the payment as being made to the foreign person, and follow all the applicable procedures.
In general, we must withhold tax of 30 percent unless a tax treaty exists between the United States and the recipient's country of residence. This tax is in addition to the North Carolina 4 percent personal services tax, if applicable.
Please contact our Payroll Coordinator at 704-894-2461 or our Accounts Payable Coordinator at 704-894-2206 to obtain the forms, and to determine the tax consequences prior to making payment arrangements with these individuals.
Once the payment has been determined to be allowable, request for payment should be made following the current Accounts Payable payment request process for checks/direct deposit (if payee has a U.S. bank account), or for wire transfers (if payment will be made to an international account).