A cross-border services fee is never just a number. Between the gross amount in the agreement and the sum that arrives, there may be withholding, currency conversion, reporting obligations and timing risk. The agreement should say who bears each.
Locate the services before locating the tax
Where the work is performed, where the paying entity sits and where the talent is resident can each trigger different obligations. The contract cannot change the law, but it can record the parties’ shared factual assumptions—and allocate the cost if those assumptions prove wrong.
Make withholding arithmetic explicit
If withholding applies, is the stated fee gross or net? A gross-up clause shifts the entire withholding cost to the payer; its absence leaves the talent absorbing a deduction they may not have priced. Either allocation is workable. Discovering the allocation after invoicing is not.
Paper the treaty position
Reduced treaty rates typically require documentation—residency certificates, beneficial-ownership forms—delivered before payment. The agreement should oblige the relevant party to provide them by a stated deadline, and say what rate applies if they do not arrive.
Currency, timing and conversion cost
Name the payment currency, who bears conversion costs and what exchange-rate reference applies. On multi-installment deals, a defined reference date prevents the payer from timing conversions opportunistically.
Know when to bring in specialist advice
These allocations are contract terms, but the underlying obligations are tax law. On matters of consequence, specialist tax or local advice in the relevant jurisdictions should be obtained before signature, not after the first surprising remittance.
Related practices
General information only. Nothing on this page is legal advice or a substitute for advice on specific facts. Legal & notices.