@PDNEP , if the foreign company worked on foreign land, even though you paid from US sources, all you do is show it as expense on your schedule- C. The foreign entity then would claim this income on their filings to local taxing authority . Us generally does no and cannot tax this foreign entity. This is active income. Foreign person having passive income form US sources are indeed taxed and generally get a 1042-S from the withholding agent and would report to their home country as foreign income and taxed at source ( USA).
Does this help ?
