Hi All,

This is JO...

I need a clarification on this:

A person has incorporated a company in Netherlands and earning income through investments, some investments made in USA since 6 years, where in return he is earning dividend.
Being a non - us resident, he has not paid any taxes on his earnings from investment in USA.

Can any one clarify whether a person need to file a tax return on incomes earned through investments in USA? If yes, then what form he need to fill?

A nonresident alien earning dividend income in the US will be exposed to a 30% withholding tax under our tax laws. If there is a treaty between the 2 countries this would probably be reduced to 15%. The income he receives will be net of tax.

No further reporting is required.

If you received dividends from a U.S. company and no U.S. tax was withheld, you need to file Form 1040NR and pay the 30% (or lower treaty rate). If it was your company that received the dividend and there was no tax withheld, then use Form 1120-F.