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Payments to Foreign Vendors

The University is required to establish the tax status of foreign entities with which it conducts business. The W-8 submitted by a foreign entity indicates whether taxes need to be withheld when payments are processed. Transactions that may trigger tax withholding include services performed in the US, and US-sourced royalties and rents. A foreign entity from a country that has negotiated a tax treaty may be exempt from tax on certain types of transactions. If they are from a country with no treaty benefits, or the activity is not covered by the treaty, payment to the vendor is subject to 30% tax withholding.

Foreign vendors are placed on a payment "hold" to ensure that all requests for payments are reviewed for compliance prior to payment being processed.

Each W-8 is reviewed for tax status determination, and each invoice submitted for payment is reviewed by Accounts Payable for taxable-type transactions.

Payments to foreign vendors are made via U.S dollar checks, and by electronic funds transfer in U.S. dollars or the foreign currency.  The process for paying a foreign vendor is described in the Electronic Funds Transfers Policy.

Invoice Requirements

A foreign vendor must provide an invoice that specifies each individual activity and location of the activity:

 Accounts Payable Process Steps

If the invoiced activity is a taxable type of transaction for that foreign vendor, AP will process as follows:

Related Links & Forms


For questions about processing the invoice or payment status, please contact Gary Ernsteen at 847.491.2781 or

For questions about vendor set-up, procedures, or policy,  please contact Elizabeth Gladic at 847.491.5338 or