Understanding Foreign Vendor Requirements #
Vendors who are not U.S. persons (individuals or entities) have different tax documentation requirements. Instead of a W-9, foreign vendors must complete a W-8BEN (for individuals) or W-8BEN-E (for entities) form.
- W-8BEN – For foreign individuals (non-resident aliens)
- W-8BEN-E – For foreign entities (companies based outside the U.S.)
- No 1099 Required – Foreign vendors generally do not receive 1099 forms
- Withholding May Apply – Payments to foreign vendors may require 30% tax withholding unless a tax treaty applies
Mark a Vendor as Foreign #
Step 1: Open Vendor Details #
Navigate to the 1099s tab and click the eye icon on the vendor row.
Step 2: Go to 1099 Info Tab #
Click the 1099 Info tab in the modal.
Step 3: Click Edit #
Click the Edit button to enter edit mode.
Step 4: Enable Foreign Vendor Toggle #
Find the Foreign Vendor toggle and switch it on.
Step 5: Select Country of Residence #
Choose the vendor’s country from the dropdown list.
Step 6: Save Changes #
Click Save to QuickBooks to save the foreign vendor status.
Identifying Foreign Vendors #
Once marked as foreign, the vendor displays a Foreign badge in the vendor table and modal header.
Request W-8BEN from Foreign Vendors #
For foreign vendors, the W-9 request option changes to request a W-8BEN form instead:
Step 1: Open the Actions Menu #
Click the three-dot menu on the foreign vendor row.
Step 2: Click Request W-8BEN #
Select Request W-8BEN (or W-8BEN-E for entities) to send the appropriate form request.
Automatic Form Selection: Debits automatically determines whether to request a W-8BEN (individual) or W-8BEN-E (entity) based on the vendor’s tax classification.
Foreign Vendor Exclusion from 1099 #
Foreign vendors are automatically excluded from 1099 filing since they receive different tax treatment. However, you should:
- Keep W-8BEN forms on file for documentation
- Track withholding if required
- Report payments on Form 1042-S if applicable
Important Tax Considerations: Payments to foreign vendors may require 30% withholding on certain payment types unless reduced by treaty, Form 1042-S reporting instead of 1099, and FATCA compliance verification. Consult with a tax professional for guidance on foreign vendor payments.
