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    IsraelTax's Avatar
    IsraelTax Posts: 2, Reputation: 1
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    #1

    Oct 25, 2011, 01:34 PM
    Israel us tax treaty
    A US company is planning to pay to an Israeli individual independent contractor a fee. Does the independent contractor needs to issue an ITIN? Does the US company should issue the contractor From 1042-S? Thanks for the help.
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    taxesforaliens Posts: 649, Reputation: 117
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    #2

    Oct 26, 2011, 08:08 AM
    If the contractor is not living in the US, he would not need an ITIN and the US company is not required to issue form 1042S as this person would not be subject to US taxes.
    IsraelTax's Avatar
    IsraelTax Posts: 2, Reputation: 1
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    #3

    Oct 26, 2011, 08:19 AM
    Thank you. However Form 1042S has a box (box 6) requesting exemption code for payments exempt from US taxes. What do you think?
    taxesforaliens's Avatar
    taxesforaliens Posts: 649, Reputation: 117
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    #4

    Oct 26, 2011, 08:28 AM
    That would be for someone working in the US and the tax treaty with the US would exempt the income from being taxed, but it still needs to be reported as the person would be liable for taxes if it weren't for the treaty.
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