Navigating the Maze: International Tax Implications for U.S. Companies Selling to Foreign Governments
Tanner outlines the key international tax risks U.S. companies face when contracting with foreign governments, a customer segment that introduces distinct complexity beyond standard export sales. The article identifies core issues including permanent establishment (PE) exposure, withholding taxes that can exceed 25% of payment, and value-added tax (VAT) registration requirements that fall on the vendor, not the sovereign customer. A recurring warning: these costs must be priced into the bid upfront, as renegotiating with a government customer mid-contract is rarely an option.
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