Deductions & credits

since every tax treaty is different you'll have to specify the country as well as the name of the other country.

we can't answer in a vacuum. then someone familiar with that tax treaty or the US tax laws concerning payments to foreigners would have to see this thread.  however, the usual purpose of a tax treaty is to prevent taxation by both countries.

finally, if you read the top of form W-8BEN it says

Do NOT use this form if:                                                                        
• You are a U.S. citizen or other U.S. person, including a resident alien individual Use Firm w-9. however, form w-9 is to obtain payee's EIN or SSN which I would bet is something they don't have.

 

1. Am I required to withhold any taxes for either contractor? since they are not located in the US and apparently are not performing services in the US, the answer would be no.  However, I should point out that if US withholding was required you're asking kind of late since you say you already made payment. 

 

see

https://www.irs.gov/businesses/taxation-of-nonresident-aliens-1 

2. Are the payments deductible in full as business expenses?  yes but if audited you should have a bill (amount and purpose would be ideal)  from then to show the payment was truly a business expense.

consider this. many companies purchase the parts and/or products they sell from overseas. think of the economics involved if they couldn't deduct the payment for them.