June 16 2020
COVID-19 Pandemic: IRS Expands Relief for Non-Residents and Foreign Corporations Engaged in Business in United States and Facing Travel Disruptions
The US Internal Revenue Service (IRS) has updated frequently asked questions (FAQs) that provide relief for non-resident individuals and foreign corporations providing services or performing other activities in the United States. Where those services or activities are provided by individuals who are temporarily in the United States solely due to travel disruptions caused by the COVID-19 pandemic those actions will under certain circumstances be ignored for purposes of determining whether a non-resident individual or foreign corporation will be deemed to be engaged in a US trade or business (USTB), or as having a US permanent establishment under US income tax treaties. The updated FAQs expand this relief by providing that the income earned from the activities in question will not be subject to the 30% gross basis tax imposed under section 871(a) or section 881(a) of the US Internal Revenue Code, solely because the non-resident individual or foreign corporation is not treated as having a USTB or permanent establishment under the relief provided in the FAQs. The FAQs were last reviewed or updated on 12 June 2020. The IRS notes that it may update these FAQs based on the evolving effects of the COVID-19 emergency.