Paying Collaborators Across Borders, tax forms, withholding, and proof of work

Paying a sound engineer in London, a video editor in Brazil, or an illustrator in Japan can feel as easy as sending an invoice through your AP system. The hard part is what happens later, when a bank asks questions, a platform requests backup, or your accountant needs to confirm you handled international contractor payments correctly.

Cross-border payments aren’t only a finance task. They’re a paper trail problem. If you can’t show who you paid, what you paid for, where the work was performed, and why you didn’t withhold (or why you did), you’re exposed.

This guide breaks down the practical pieces: the right tax forms, when withholding comes into play, and what “proof of work” should look like if you ever need to defend your process.

Start with the two facts that drive everything: who they are, and where the work happened

Before you think about tax forms, lock in two basics: is the payee a U.S. person or a foreign person, and where were the services actually performed. Those two facts often decide whether your payment is in the IRS “withholding and reporting” bucket.

If the collaborator is a U.S. person (citizen, resident, or a U.S. entity), you typically collect a Form W-9 and consider 1099 reporting rules. If they’re a foreign person, you typically collect a W-8 form instead. The goal is simple: document status upfront, before the first payment. Chasing paperwork after funds go out is where teams get stuck.

Work location is the next pressure point. For services, the IRS generally cares about where the services were performed, not where your company is based, not where the invoice came from, and not what currency you paid in. If a non-U.S. contractor performs services entirely outside the United States, that income is generally foreign-source, which often means no U.S. withholding. If the work is performed in the United States, the payment can become U.S.-source compensation, which is where withholding risk shows up fast.

This gets tricky in the real world. A collaborator might be “based in Spain” but fly to Miami for a shoot week. Or a producer might split time across countries. Your process has to capture that nuance, not ignore it.

A good onboarding flow also helps with operations. Xe’s breakdown of what to collect for overseas payees is a useful reference point for finance teams that want a clean checklist without overcomplicating it (see what to collect for overseas contractors).

Tax forms and withholding: what to collect, when to withhold, and what to file

Think of tax forms like boarding passes. Nobody wants to talk about them, but without them, the trip stops at the gate.

Here’s the plain-English map most U.S. startups and SMBs use when paying foreign collaborators for services:

Form	Typical use case	What it helps you prove
W-8BEN	Foreign individual contractor	They’re not a U.S. person, and they may claim treaty benefits when applicable
W-8BEN-E	Foreign entity (company)	The vendor is a non-U.S. entity, with FATCA and withholding classifications
Form 8233	Foreign individual doing services in the U.S. and claiming a treaty exemption	A treaty-based reason to reduce or eliminate withholding on U.S.-performed services
W-8ECI	Foreign payee claiming income is effectively connected with a U.S. trade or business	A different withholding treatment and reporting approach than typical “30% withholding” rules

The withholding headline most teams miss

If you pay a foreign person for services performed in the U.S., the default withholding framework can be harsh (often described as a 30% rule unless a valid exception or treaty claim applies). Treaties can reduce or remove withholding, but the burden is on your process to collect the right paperwork and apply it correctly.

If you pay a foreign person for services performed entirely outside the U.S., withholding often isn’t required because the payment is generally foreign-source. That’s why “proof of work location” matters as much as the form itself.

Reporting (and why “0% withheld” can still mean paperwork)

When payments to foreign persons are U.S.-source and reportable, many companies end up filing Form 1042-S (even in cases where withholding is reduced by treaty). Form 1042-S is commonly due March 15 for the prior calendar year.

For the IRS’s own guidance aimed at the payer side, keep Instructions for the Requester of Forms W-8 bookmarked. It’s dense, but it clarifies documentation standards and when you can rely on a form.

If you’re hearing about W-8 series changes and trying to confirm which version or rules matter now, a higher-level perspective can be helpful too (see PwC’s summary on W-8 series updates).

One more practical point: don’t mix systems. If AP, payroll, and procurement each store different “final” versions of a W-8, you’ve created the perfect environment for errors.

Proof of work: how to document services, location, and deliverables (so audits don’t turn into chaos)

If tax forms answer “who is this payee,” proof of work answers “what did we buy, and where did it happen.” That second part is what people forget, then regret.

When a payment is questioned, you want to produce a tight package: contract, invoice, and independent evidence that the work was performed where you said it was. This matters for tax, but it also matters for creative businesses because documentation supports your chain of title and ownership story.

What “proof of work” should include (in human terms)

You don’t need a spy-level dossier. You need a consistent file that matches how your team actually works:

• A signed independent contractor agreement and scope of work that states services, dates, and work location expectations (remote, on-site, or mixed).
• Invoices that describe deliverables clearly (not “creative services”), with service period dates.
• Objective workflow evidence, such as time logs, edit review comments, project management tickets, or version history from your file tools.
• Delivery receipts: final exports, transfer confirmations, email handoffs, or platform uploads tied to the invoice line items.
• If travel is involved, a simple internal note of where the work was performed and why (for example, “3-day shoot in Los Angeles”).

A helpful habit is requiring one sentence on invoices for cross-border services: “Services performed outside the United States” or “Services performed in the United States,” as applicable. It won’t fix withholding by itself, but it creates a contemporaneous record that supports your treatment.

Don’t let tax compliance break your IP rights

Cross-border collaborators often touch valuable intellectual property: tracks, footage, scripts, designs, brand assets. Proof of work should connect to IP protection. If a dispute later pops up, you’ll want to show who created what, when, and under what rights.

Chase Lawyers regularly helps creative brands and companies tighten these gaps, both on the payment compliance side and the ownership side. If your collaborators are generating protectable work, it’s smart to align your contractor paperwork with your IP plan (see Chase Lawyers’ overview of copyright legal services for creatives).

And if you’re working with talent, producers, influencers, or international creative teams, having counsel that understands cross-border entertainment operations matters. Chase Lawyers is a top-rated boutique firm with offices in Miami and New York City, built to support creative industries with practical legal strategies, not generic templates. Their international entertainment legal services can help you set a defensible process for contracts, documentation, and cross-border risk.

Conclusion

Paying collaborators across borders is easy to do quickly, and hard to do cleanly. The safest approach is to lock in payee status, document where the work happened, collect the right W-8 or treaty forms before money moves, and keep proof of work that matches your invoices.

If your team is scaling international contractor payments and you want a process that stands up in real life, Chase Lawyers can help you build the contracts and documentation structure that protects both tax compliance and creative rights.