Some countries require clients to withhold tax from payments to foreign freelancers. Learn which countries withhold, how to minimize withholding using tax treaties, and how to get credit for withheld amounts.
Some countries require payers (your clients) to withhold a percentage of your payment and remit it directly to their government, rather than paying you the full amount. As a foreign freelancer, you may receive less than your invoice amount due to withholding.
US clients paying foreign freelancers: US companies are required to withhold 30% on payments to non-US freelancers for US-source income, unless a tax treaty reduces this rate. You submit a W-8BEN form to claim treaty benefits.
India: Companies are required to withhold TDS (Tax Deducted at Source) on payments to service providers, including foreign freelancers.
Brazil: IRRF (Imposto de Renda Retido na Fonte) withheld on payments to foreign service providers.
If you are a non-US freelancer with US clients:
Many countries have treaties reducing the rate to 0-15%. UK freelancers: 0% under US-UK treaty. German freelancers: 0% for business income. Check the treaty for your country.
Withholding paid to a foreign government typically qualifies as a foreign tax credit in your home country, reducing double taxation. Claim it on your home country tax return.
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