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Cambodian payroll

I need your help with this issue.  I'm doing some work for a small NY non-profit, who employs people in Cambodia.  The issues are, one employee is a US citizen, living and working in Cambodia.  I am only withholding FICA taxes for her, and she will get a W-2 at the end of the year.  There's another employee who is not a US citizen.  She insists that the company is not obligated to give her a W-2 or a 1099.  I have not been able to find anyone who can give me a clear answer on this.  The company needs to comply with all laws.

Any information will be helpful.

Helen Rosen

Answers

Shailesh Bettadapur
Title: VP & Treasurer
Company: Mohawk Industries
(VP & Treasurer, Mohawk Industries) |

If this person is not a US resident, then she is right. No W-2 or 1099. She need only comply with Cambodian tax laws, of which there are not many.

Helen Rosen
Title: President
Company: Direct Approach Solutions, LLC.
(President, Direct Approach Solutions, LLC.) |

Thank you Shailesh. Can you recommend a Cambodian payroll service?

Helen

Bruce Marsden
Title: Senior Finance Manager
Company: U.S. Trust
(Senior Finance Manager, U.S. Trust) |

That is correct, from the IRS' Publication 515:

"Services performed outside the United States. Compensation paid to a nonresident alien (other than a resident of Puerto Rico...) for services performed outside the United States is not considered wages and is not subject to withholding."

Good luck!

Helen Rosen
Title: President
Company: Direct Approach Solutions, LLC.
(President, Direct Approach Solutions, LLC.) |

Thank you Bruce.

Debbie Zarbock
Title: Independent Accounting Professional
Company: Self Employeed CPA
(Independent Accounting Professional, Self Employeed CPA) |

Remember to have the vendor/contractor complete form W-8Ben, the nonresident equivalent to the W-9.

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