When processing payments to foreign individuals, it is SMU’s responsibility to maintain tax and immigration compliance set forth by IRS regulations. Refer to the Non-Payroll Payment Process Flow Chart for the various documentation and pre-approval items requested for submission of payments to foreign payees, to ensure the proper taxation and IRS reporting.
The Foreign Nationals Office will review the requested documentation and provide payment options or further guidance if needed. Depending on the type of payment, additional substantiation (such as Independent Contractor Approval for honorariums or receipts for reimbursements) may be required for the payment submission.
Prior to inviting a foreign visitor/guest, the department should inquire what type of visa the visitor currently has or will acquire. For information regarding SMU sponsored visas contact the International Student & Scholar Services Office. The Most Common Types of Visas chart reflects the permissible payments per visas status.
Completion of the Foreign National Information Form (FNI) and submission of passport and visa copies are requested from all foreign payees in which services or travel are performed domestically (in the U.S.). These documents should be forwarded to the Foreign Nationals Office prior to engagement and invitation of a foreign visitor. The identification documents (passport/visa) along with pertinent questions reflected on the FNI (such as duration of services) will determine if the requested payment is permissible, subject to tax withholding, and eligible for a tax treaty.
All foreign persons/suppliers must complete IRS Form W-8BEN to certify the Nonresident Alien's (NRA) name, address, citizenship, and residency status. This information is used for tax reporting purposes as well as establishing an SMU Supplier record for A/P payment.
When engaging a foreign individual for services performed outside of the United States, associated payments are not subject to U.S. tax withholding nor reporting. Foreign services are considered to be “sourced” abroad (outside of the U.S.) and, therefore, not subject to U.S. tax laws. The Foreign National Information Form is not needed for services performed abroad, but the Form W-8BEN and Independent Contractor Approval are required.
For additional information and/or assistance with foreign visitor payments, contact the Foreign Nationals Office.