Foreign Payments

Payments to individuals and entities not based in the U.S. must adhere to certain rules and documentation requirements in order for Emory to be compliant with U.S. law. This page provides an overview of the procedures for making different kinds of foreign payments.

There are two kinds of foreign payments – foreign source payments (for payments to foreign entities and individuals whose activities take place entirely outside the U.S.), and payments to foreign visitors to the U.S. (e.g., honorarium payments for guest speakers from abroad). Please note that Emory cannot legally make payments to foreign visitors in some instances. Whether or not Emory can pay fees or honoraria depends on the visitor’s visa status and in many cases the visitor’s adherence to the 9/5/6 rule.

Tax Considerations

In general, foreign source payments (payments to entities and individuals located outside the U.S. who do not provide their services to Emory inside the U.S.) are not subject to U.S. tax.

Some payments to foreign entities or individuals may be deemed taxable. Payments for subscriptions, license fees, copyrights, and similar items are considered payment of a royalty. Reach out to the Emory’s Nonresident Tax Services to determine if your foreign entity payment will be taxable.

For foreign visitors to the U.S., whether Emory can legally pay these individuals and what their tax treatment will be depends on a number of factors, including: visa type, length of travel to the U.S., purpose of visit, country of tax residency, and prior visits to the U.S. Payments to foreign visitors to the U.S. include fees, honoraria, scholarships, awards, and expense reimbursements – all of which may be taxable.

Payment Rules for Foreign Visitors

To determine whether and how to pay your visitor, you will need to review their residency status, the location of the services performed, and their visa status.

  1. Location of Services: Were the services for this payment performed entirely outside the U.S.?
    • If yes, proceed with processing your payment as a Foreign Source Payment Request (guidance below)
    • If no, move onto question 2
  2. Residency Status: The procedures for payments to foreign individuals who meet the criteria of a “non-resident alien for U.S. tax purposes” (NRA). While your visitor may be traveling from abroad for your activity, he or she may be considered a U.S. permanent resident or a resident alien for tax purposes. In these cases, their payments may be processed like domestic payments. Use the following questions to determine if your visitor is an NRA, a permanent resident, or a resident alien for tax purposes:
    • Does your visitor meet the criteria of the Green Card test?
      • If yes, your visitor is a permanent resident, and you can process their payment as a normal payment through the Compass Payment Request module
      • If no, does your visitor meet the criteria of the substantial presence test?
        • If yes, your visitor is considered a U.S. resident for tax purposes. You can process their payment as a normal payment through the Compass Payment Request module
        • If no, your visitor is considered a non-resident alien for U.S. tax purposes. Move onto question 3
  3. Is the payment allowable under your visitor's visa type?
    • Will you visitor be traveling on a B-1, B-2, WB, or WT visa?
      • If yes, does your visitor meet the requirements of the 9/5/6 rule:
        • Your visitor is being compensated for “usual academic activity” for 9 days or fewer, AND
        • Your visitor has not been paid or reimbursed by more than 5 other U.S. organizations during the past 6 months
      • If no, please review the Special Rules Chart for payments to visitors on other visa types
    • If your visitor is traveling on a B-1, B-2, WB, or WT visa and does not meet the 9/5/6 rule criteria, Emory cannot legally pay a fee or honorarium to your visitor. If your visitor is not traveling on a B-1, B-2, WB, or WT visa and does not meet the criteria of the Special Rules Chart, Emory cannot legally pay your visitor.

If the payment meets the criteria listed above for paying a foreign visitor, see details below on expense reimbursements, tax treatment, and procedure for payments to foreign visitors to the U.S.

Expense reimbursements for foreign visitors to the U.S.

If you will need to reimburse expenses for your visitor, you will need to process such payments separately from fee or honoraria payments. See our guidance on expense reimbursements for international visitors for more information on those payments.

Tax treatment for foreign visitors to the U.S.

There are two tax considerations for payments to foreign visitors the U.S. – who will pay the taxes, and whether the visitor is eligible for tax treaty benefits.

Who pays the taxes? Visitors vs. Departments

  • Visitors on B-1, B-2, WB, or WT who are eligible for payment (i.e., they meet the 9/5/6 rule criteria) will have their payment taxed at a rate of 30% unless tax treaty benefits are applicable and are requested. If your visitor is not eligible for tax treaty benefits, or will not apply for them, either the visitor can pay the tax, or the department can pay the tax:
    • If the department pays the tax: The base payment will be grossed up 42.9% to cover the tax payment. The visitor will receive the base amount, and the gross-up will be paid to the IRS. Please note such tax payments may not be allowable from sponsored accounts – discuss with your RAS unit whether such a payment may be paid by your sponsored account.
    • If the visitor pays the tax, 30% of their payment will be withheld and the net amount will be paid to the visitor.
    • The department will indicate who pays the taxes in the Compass Payment Request module when processing the payment for the visitor.
  • Visitors on other visa types whose payments are allowable based on the special rules chart may face different tax rates. Reach out to the Emory’s Nonresident Tax Services to determine what tax rate you can anticipate for your visitor.
    • In terms of handling the tax, the same procedures as above will apply – either the visitor can pay the tax, or the department can pay the tax, and it may not be allowable for sponsored accounts to pay the taxes.

Tax Treaty Benefits

If your visitor is eligible for tax treaty benefits and wishes to apply for those benefits, additional information and paperwork is required. More detail on applying for tax treaty benefits below.

Procedure – how to pay foreign visitors to the U.S.

Payments to visitors are processed through the Compass Payment Request Module. Payments can be paid by check, ACH, or international wire. Keep in mind that Emory does not mail checks to a small number of high-risk countries. Further, please note that expense reimbursements to foreign visitors must be made separately from their payments (fee, honorarium, etc.).

If the visitor wants an ACH payment (they will need to have a US bank account), attach a completed ACH form. If the visitor is to be paid by international wire, see the Compass Foreign Wire Payment Request Job Aid. Please see the full instructions for processing foreign payments to individuals from Finance here: Paying Foreign Individuals through Compass >>

Review the Finance Foreign Individual and Entity Payment Request Cheat Sheet for an overview of the documentation required for your payment. Documentation includes:

  • Emory University’s Compliance Statement for Payment to Visitors
    • A scanned copy of the signed form will be attached to your payment request, but departments must keep the original form on file for seven (7) years. Your department assumes responsibility for any tax, interest, or penalties that could arise from the inability to provide the original documentation if requested by the IRS.
  • W-8BEN – Certificate of Foreign Status for Individuals (see instructions here)
  • Copy of I-94 record
    • Please note, if anyone other than the traveler pulls the I-94 card, the express written permission of the traveler is needed to do so. U.S. Customs and Border Protection states, “You are not authorized to access this website to retrieve records of another person unless you are the person's legal guardian, or you have the person's consent.”
    • Information should include passport expiration date and country of origin
  • Copy of visa entry stamp
  • Copy of passport
  • Copy of flyer (if available), or written explanation of business purposes for payment
  • Payment details (for payment by wire, ACH, or check)
  • Supplier Information Form (only required if the individual is not already set up in Compass, or if details, such as address, have changed)

Additional documentation for other visa types:

  • For J-1 visa holders, a copy of the DS-2019 Form and a letter from the responsible officer issuing the DS-2019
  • For F-1 students authorized for Curricular Practical Training, a copy of the I-20 Form
  • For F-1 students participating in Optional Practical Training, a copy of the I-20 Form and the Employment Authorization Document

Additional documentation for application of tax treaty benefits:

  • Visitor signed Immigration Status Data Form (see Tax treat benefits – procedure)
  • Visitor signed form 8233 (see Tax treat benefits – procedure)

Please note, scanned or faxed copies of signed forms can be submitted, but electronic signatures are not acceptable. Forms must be signed with a “wet” signature.

Tax Treaty Benefits – Procedure

  1. If your visitor is applying for tax treaty benefits, request from Emory's Nonresident Tax Services a username and password for the Foreign National Information System (FNIS) nonresident questionnaire. Have the visitor log in and complete the FNIS nonresident questionnaire. Please note, your visitor will need the dates and related visa types for previous U.S. visits over the past three years. For travel to the US under F, J, M, or Q visas, approximate dates of visits may be requested as far back as 1985. Instructions >>. Global Services recommends working with the visitor to complete the questionnaire before he or she arrives on campus.
  2. After your visitor completes the questionnaire, the department emails Emory’s Nonresident Tax Services at nonresident.tax@emory.edu to request review of the visitor’s FNIS immigration status data for tax treaty benefits. Your department will be notified within three business days if more information is needed and if benefits are applicable.
  3. If a tax treaty exemption is applicable, the Nonresident Tax team will upload Form 8233 to the FNIS system. The visitor will log into the FNIS system, print Form 8233 as well as the FNIS Immigration Status Form, and sign both. Global Services recommends the visitor print and sign these on campus, so the department will have the original copies. Instructions for printing from the FNIS system are found here.
  4. Scan the signed forms and submit both via email to nonresident.tax@emory.edu with “Form 8233 for Visitor” in subject line. You will also attach a scan of the signed Form 8233 to your payment request, so tax treaty benefits will be applied to the payment. Keep the signed original Form 8233 as well as the FNIS Immigration Status Form on file in your office for seven (7) years. Your department assumes responsibility for any tax, interest, or penalties that could arise from the inability to provide the original documentation if requested by the IRS.

Payment timeline - foreign visitors to the U.S.

Global Services recommends collecting and completing as much documentation as possible before your visitor arrives on campus. This could include writing the business purpose if there will not be a flyer for your visitor’s stay on campus, working with your visitor to enter correct information in required forms like the Compliance Statement and the W-8BEN, and having your visitor complete the Foreign National Information System questionnaire if he or she will be applying for tax treaty benefits. This way, when they arrive, only signatures remain for completion.

Once all the required supporting documentation has been submitted through Compass and to the controller’s office, payment will be issued within 10-14 business days.

Foreign Source Payments – Paying Foreign Entities and Foreign Individuals Outside the U.S.

Foreign source payments are payments foreign entities and foreign individuals whose services take place entirely outside the U.S.

While foreign source payments are typically not subject to U.S. federal income tax, tax withholding, or any U.S. reporting obligations, foreign countries may have applicable tax requirements for these payments.

Please also note that payments for subscriptions, license fees, copyrights, and similar items are considered payment of a royalty and generally subject to U.S. federal income tax withholding at 30%. Reach out to the Emory’s Nonresident Tax Services to determine if your foreign source payment will be taxable.

If you are paying a foreign entity or individual involving no travel to U.S. (i.e., all services took place outside the United States), payments to all foreign individuals as well as entities being paid by wire payment currently must be originated through Compass Payment Request module.

For completing a foreign source payment, review these instructional aids:

Documentation required for foreign source payments to individuals and entities:

Please note, scanned or faxed copies of signed forms can be submitted, but electronic signatures are not acceptable. Forms must be signed with a “wet” signature.