PAYMENTS TO FOREIGN ENTITIES

The following steps should be followed when making a payment to a foreign entity: 

An entity is considered foreign if it is created or organized outside the United States.  This includes entities that may have operations in the United States, but the parent company is organized outside the United States.  Depending on the type of payment, all payments made to or on behalf of a foreign entity are generally subject to income tax withholding unless specifically exempted either by U.S. tax law or an income tax treaty.  Generally, payments not exempt from withholding are subject to 30% federal income tax withholding, in accordance with IRS regulations.

-Please read and become familiar with the Payments to Foreign National and Entities Policy at: http://www.columbia.edu/cu/administration/policylibrary/responsible_office/acpy.html

-A properly completed Form W-8 will be required before a vendor is setup in the system and a payment is issued. Consider the following, when choosing the proper W-8 form to use:

• Form W-8BEN (use if other W-8 forms are not applicable)

• Form W-8ECI is applicable if the foreign entity has a trade or business in the United States;

• Form W-8IMY is applicable if foreign entity acts in the capacity of a custodian, broker, nominee or any other person that acts as an agent for another person; or

• Form W-8EXP is applicable primarily when the foreign entity is a foreign government, foreign bank, foreign tax-exempt organization or foreign foundation.

Generally, a Form W-8 provided without a U.S. TIN will remain in effect for a period starting on the date the form is signed and ending on the last day of the third succeeding calendar year, unless a change in circumstances makes any information on the form incorrect. Please reference the latest Form W-8 instructions on the IRS website at http://www.irs.gov/pub/irs-pdf/iw8.pdf for additional instructions and information.   

Columbia University employees and department are expected to review the completed / signed forms for accuracy and completeness prior to submitting the form to Vendor Maintenance.  If the payee name or address on the Form W-8  does not match the new vendor request and/or system the request will not be processed. When processing the transaction in the Accounts Payable system,  The completed signed forms and supporting documentation can be faxed to Vendor Maintenance at (212) 851-9704 .

For more information regarding making payments to foreign entities please contact Roberto Escalante at re2144@columbia.edu or Pat Mapp at pm3@columbia.edu.