Persons subject to NRA withholding

NRA withholding applies only to payments made to a payee that is a foreign person. It does not apply to payments made to U.S. persons.

Usually, you determine the payee's status as a U.S. or foreign person based on the documentation that person provides. However, if you have received no documentation or you cannot reliably associate all or a portion of a payment with documentation, then you must apply certain presumption rules.

The “Identifying the Payee” section in Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, has a longer discussion of how to handle payments in these situations:

• When the payee is not the person you pay
  • U.S. agent of a foreign person
  • Disregarded entities
  • Special Chapter 4 rules
• Flow-Through Entities
  • Chapter 3 payees
  • Chapter 4 payees
  • Foreign partnerships
  • Foreign simple and grantor trusts
  • Fiscally transparent entities claiming treaty benefits
• Foreign Intermediaries
  • Special rule for chapter 4
  • Nonqualified intermediaries (NQI)
  • Qualified intermediaries (QI) 
    • Qualified derivatives dealers (QDDs)
    • Branches of financial institutions
    • QI agreement
    • Documentation requirements
    • Reporting requirements
  • U.S. branches of foreign banks and foreign insurance companies
  • Withholding foreign partnership and withholding foreign trust
    • WP agreement and WT agreement
    • Documentation

Related

• NRA Withholding