Payments to Foreign Entities

Contact Tax Services prior to contracting with or making payment to a foreign entity or individual.  

Tax Services will communicate with Minnesota Management and Budget (MMB) on the behalf of Minnesota State colleges and universities to facilitate the set up and activation of foreign suppliers in SWIFT.  

All payments will initially be placed on a “hold” per MMB’s new Foreign Supplier Policy. MMB's Systems Compliance team will release the payment hold after reviewing the information provided on our foreign vendor intake form. 

Some payments made to foreign individuals and companies may be subject to 30% federal nonresident alien withholding tax and IRS reporting.   Generally if the payment is to a foreign entity and is 1099 reportable, it will be subject to nonresident alien taxation and reporting. 

  • Services
  • Honorariums
  • Software
  • Royalties (ex: purchasing the right to use a photo, video, music, play etc)
  • Legal Settlements
  • Prizes/Awards - including gift cards and non-monetary awards
  • Scholarships

1. Prior to making a payment to a foreign individual or business, please review the Foreign Vendor Payment Instructions:

Foreign Vendor Payment Instructions

2. Request that the vendor provide the IRS form W-8 that is appropriate for their business:

  • W-8BEN - Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)
  • W-8BEN-E - Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities)
  • W-8ECI - Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States
  • W-8EXP - Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding and Reporting

3. Complete the Foreign Vendor Intake Form.

4. Send the W-8, completed Foreign Vendor Intake Form and purchase contract to Tax Services at via MoveItSecurely.

NRA documents:

Vendor Tax Residency Information Form - honoraria, speaker's fees, services

Foreign Vendor Intake Form

B Honoraria Certification - contact Tax Services for B Honoraria Rules

NRA Payments Tax Reporting Spreadsheet

Procedure for Withholding of Tax on Payments to Nonresident Alien Vendors