We own an International Web Development company and get hired from all over the globe. We need to know if one of our US clients, needs to pay taxes for hiring us.
They paid us $750.00USD via PayPal. How are taxes handled in this case for him?
My accountant told me that payments to foreign persons or companies are subject to 30% federal withholding unless:
I obviously can't give accounting advice, but this is the process I have been following. Also, in my research it appears some marketplace websites such as oDesk may do away with the need for a W8-BEN since you are paying oDesk instead of paying the contractor directly.
If I'm understanding the situation correctly.
Assuming you are working as an independent contractor then the US company will just pay your invoice. Your US client would not pay US taxes or money on that $750 they paid you. Depending on your country you will have to pay taxes on that 750 received and maybe should be charging a service/sales tax on some items. But, you US client should just be paying the $750.