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US Withholding Tax

US payers must withhold 30% on US-source FDAP income paid to non-residents under IRC Section 1441. Treaty rates often reduce this to 0% to 15%. This guide explains the mechanics.

Answer

US payers withhold 30% on US-source FDAP income (dividends, interest, royalties, rent) paid to non-residents under IRC Section 1441. Wyoming LLC owners file Form W-8BEN-E with US payers to claim treaty benefits and reduce default 30% to 0% to 15% depending on country and income type. Sales of goods and services performed outside the US are NOT FDAP and are not subject to this withholding. Most non-resident operating LLC payouts (Stripe revenue, Amazon payouts) are not FDAP and pass through without withholding.

By Zawwad, Founder & CEO, WyomingLLC by Topslice LLC.

Last updated May 20, 2026

What gets withheld

  • US dividends paid to non-residents: 30% (treaty: often 0% to 15%)
  • US interest (portfolio): 30% (treaty: often 0% to 10%)
  • US royalties: 30% (treaty: often 0% to 15%)
  • US rent (gross election): 30% (treaty does not typically reduce)
  • Certain US-source services: 30% in some cases

What does NOT get withheld

  • Operating revenue from non-US customers (no US source)
  • Sales of inventory (goods)
  • Services performed outside the US
  • Capital gains on US stocks (taxed differently)
  • Foreign-source income (by definition)

How to reduce withholding via treaty

  1. File Form W-8BEN-E with the US payer
  2. Specify your country of residence on Line 5
  3. Cite the relevant treaty article on Part III
  4. Provide your LLC's EIN on Line 8
  5. Payer applies treaty rate instead of 30%
  6. Renew W-8BEN-E every 3 years

Frequently asked questions

Does Stripe withhold from my payouts?
Most Stripe payouts to non-residents for goods or services performed outside the US are NOT subject to withholding. Stripe withholds only if FDAP applies (rare for typical SaaS or e-commerce).
What is the default rate without treaty?
30% on US-source FDAP under IRC Section 1441.
Can I claim treaty rate retroactively?
Withholding already applied is generally not refunded. Get W-8BEN-E on file BEFORE income is paid.
How do I get withheld tax back?
If excess was withheld and you have no US tax liability, you can file Form 1040-NR claiming refund. Process takes months.

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