Not all payments received from US payers are subject to US withholding. Withholding is generally determined based on US sourcing rules as well as whether any exceptions apply. Regardless of whether withholding applies, the recipient will still need to provide a US Form W-8 or W-9 to identify their tax residency and, if withholding does apply, that they are either eligible for a US exception or a reduced rate under a US treaty.
In determining whether withholding may apply, the US sourcing rules should first be considered. Payments from the US payers that are not US source payments should not be subject to withholding.
Below is a table identifying the source of the payment.
| Payment Type | Source is determined by |
| Salaries, wages, and other compensation | Where services are performed |
| Payment for personal services | Where services are performed |
| Dividends | Whether the company is US or non-US |
| Interest | Residence of the payer |
| Rents | Where the property is located |
| Royalties | Where the property is used |
| Sale of real property | Location of the property |
| Sale of personal property (including shares) | Tax residence of the seller |
