Vouchers for Foreign National Vendors

Please be reminded that when using a voucher to pay foreign national vendors, one of the actions below must be taken to comply with Federal Tax Requirements.

Available Options:

1. Unpost the voucher and reduce the vendor payment by 14%.
   Example: A vendor payment of $1,000.00 would be reduced to a payment of $860.00 to account for the $140.00 in tax withholding. The tax will be journaled to the project after the payment has been made.
2. Pay the vendor the full amount on the invoice and the department pays the tax on the vendor’s behalf.
   Example: A vendor is paid the full $1,000.00 listed on their invoice. A JV from Accounting later charges the voucher project and accounts for the 14% ($1,000/.86 = 162.79).

Option two is typically done more often. It is a required 14% tax.