Treas. Reg. 1.1441-1(b)(1): withhold 30 percent unless documentation supports a reduced rate (26 CFR 1.1441-1(b)(1))
The US buyer withholds the full 30 percent on every royalty payment to a foreign holder until it has a valid tax form on file that supports a lower rate.
Dated 18 Oct 2026Source checked 18 Oct 2026Basis: primary text
In the source's own words
“A withholding agent must withhold 30 percent of any payment of an amount subject to withholding made to a payee that is a foreign person unless it can reliably associate the payment with documentation upon which it can rely to treat the payment as made to a payee that is a U.S. person or as made to a beneficial owner that is a foreign person entitled to a reduced rate of withholding.”
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