The USA levies a 30 % domestic withholding tax on services provided locally. In particular, the IRS form series “W" is the essential tool to avoid U.S. withholding tax right at the source and to get 100 % of the invoice amount refunded by the U.S. client. In other cases, such as dividends or royalties, the amount of withholding tax can be significantly reduced on the basis of the double taxation treaty. Florian Hintz and Martin Hummer explain the significance of withholding taxes and their avoidance or reimbursement using a practical example.
