To conduct business with a supplier, the entity or individual must be onboarded and have an active Supplier Number in the UMass Supplier Database. Department users will use one form to request foreign suppliers through the BuyWays Supplier Request Form.
Log Into BuyWays: BuyWays Login (A-B-D-L-P-M)
The Supplier Request Form - Foreign Entity & Individual job aid details how to use the BuyWays Supplier Request Form to onboard a new foreign supplier.
After the Supplier Request Form is completed and submitted by the department, the UPST will vet the supplier request and invite, proxy, and or update the information requested within the supplier record.
Nonresident Alien Tax Withholding
The paperwork required to add a foreign supplier is dependent upon the foreign supplier’s immigration status and the nature of the payment. Use checklists and flowcharts below to assist you in defining the nature of the payment.
Section 1441 requires withholding agents to withhold tax on payments made to the nonresident aliens for U.S. tax purposes. As a withholding agent, University of Massachusetts is liable for any tax required to be withheld. This liability is independent of the tax liability of the foreign person to whom the payment is made. Section 1461 states that if a withholding agent fails to withhold and the foreign payee fails to satisfy its U.S. tax liability, then both the withholding agent and the foreign person are liable for tax, as well as interest and any applicable penalties.
U.S. tax law classifies all categories of income as either U.S. source or foreign source based on multiple criteria.
Most types of U.S. source income received by a nonresident alien are subject to U.S. tax of 30%. The tax is generally withheld from the payment made to the nonresident alien. A reduced rate, including exemption, may apply if there is a tax treaty between the nonresident alien's country of residence and the United States. Generally, services performed in the U.S. (honoraria, speaker, consultant, performer), scholarship/fellowship, royalties/licenses (i.e. the right to use images, films, music, arts, text, copyrights, patents, software licenses, or other intellectual property), prize, award, and human subject payment. These U.S. sourced payments are subject to 30% of federal income tax withholding in the absence of income tax treaty benefits.
If income received by a nonresident alien is classified as foreign source, it will not be subject to U.S. tax. Generally, goods purchasing, services performed outside the U.S. (honoraria, speaker, consultant, performer), rental location outside the U.S.
Nature of the Payment
Services performed in the U.S. (honoraria, speaker, consultant, performer), scholarship/fellowship, royalties/licenses (i.e. the right to use images, films, music, arts, text, copyrights, patents, software licenses, or other intellectual property), prize, award, and human subject payment. These U.S. sourced payments are subject to 30% of federal income tax withholding in the absence of income tax treaty benefits.
- Individual (non-U.S. citizen and not a lawful permanent resident/green card holder): UPST will create a SPRINTAX shell record for the supplier after you submit a request. A step-by-step Sprintax Calculus Supplier Training Guide can be provided to the supplier. When the Sprintax Calculus record is completed, required forms will be generated by Sprintax for submission. Signed forms and supporting documents must be submitted into your Sprintax profile to UPST.
- Entity (Company/Organization): An IRS W-8 form is required (commonly W-8BEN-E, also W-8ECI, W-8EXP or W-8IMY). W-8 forms and instructions are available on the W-8 Forms and Instructions webpage.
Goods purchasing, services performed outside the U.S. (honoraria, speaker, consultant, performer), rental location outside the U.S.
- A Foreign Sourced Supplier Form is required.
The supplier must be performing services for the benefit of the University of Massachusetts (e.g. Guest Speaker, Guest Lecturer, Performer, Independent Contractor and Interview Candidate). Campus requester must attach an invitation letter or volunteer letter acknowledging the donation of services and listing any travel costs/benefits that will be provided by UMass.
- A Foreign Supplier Reimbursement Form is required. Do NOT use this form if reimbursements are made for the benefit of the individual to aid such individual in pursuing his/her study or research. The payment would be classified as a non-service scholarship or fellowship because the supplier is not providing any services. The reimbursement is not excludable under the accountable plan rules and must be taxed accordingly. Example: A student participating in a UMass graduate program travels to a conference out-of-state. Although the student will not be presenting at the conference, UMass graduate program agrees to pay $500 for travel costs so the student is able to experience a conference. Please see Payments to Students Guide for more details.