Get Form 4224 (Rev. March 1996). Exemption From Withholding Of Tax On Income Effectively Connected With

Generally, you can receive effectively connected income only if you are a nonresident alien engaged in a trade or business in the United States during the tax year.

Generally, when a foreign person engages in a trade or business in the United States, all income from sources within the United States connected with the conduct of that trade or business is considered to be Effectively Connected Income (ECI).

Income effectively connected with the conduct of a trade or business in the United States is not a withholdable payment under chapter 4 and thus is not subject to withholding under FATCA.

Purpose of Form. —This form is used to obtain an exemption from withholding of tax on certain income for nonresident alien individuals and fiduciaries, foreign partnerships, and foreign corporations.

The term trade or business generally includes any activity carried on for the production of income from selling goods or performing services. It is not limited to integrated aggregates of assets, activities, and goodwill that comprise businesses for purposes of certain other provisions of the Internal Revenue Code.

The portion attributable to services performed in the United States is U.S. source income, and the portion attributable to services performed outside the United States is foreign source income. The earnings portion of a pension payment is U.S. source income if the trust is a U.S. trust.

U.S. source fixed or determinable annual or periodical (FDAP) income, such as U.S. source interest, royalties and dividends, and U.S. source capital gain income is treated as effectively connected to the conduct of a U.S. trade or business if (1) the income is from assets used in the active conduct of a U.S. trade or ...

882(a)Imposition of Tax A foreign corporation engaged in trade or business within the United States during the taxable year shall be taxable as provided in section 11 or 59A, on its taxable income which is effectively connected with the conduct of a trade or business within the United States.