Do I have to report to the IRS interest paid on a loan from a foreign investor(no SS#) in my company?

Question

Short term loans from Foreign investors to my business with a monthly interest payment to them. How do I report the interest expense to the IRS and do I have to issue a 1099 INT when there is no social security number? Is the foreign investor liable for any US taxes on interest earned?

Answer 1

I would retain a CPA with expertise in payments to foreign investors before going forward with whatever you are doing. Taxes are payable on that interest, but you will probably be required to withhold it from the payees of the interest and pay that over to the IRS. If you fail to do so, YOU will be responsible for the taxes. There are special reporting forms that you must use for payments to foreign investors.