When you buy bonds from a corporation based outside
the U.S., taxation can be complicated if the bond isn't registered
with the SEC and doesn't report interest payments to the IRS.
Then it's up to you to calculate the taxes you owe on your income
from the bond. If you buy the bond at a premium or discount,
the calculation may be further complicated.
You'll probably need help from your tax adviser to determine the
tax you owe.
The country in which the issuer is based may tax
investment income too. If so, that country will probably withhold
taxes from your interest payments. To avoid paying tax twice on
the same income, you can claim a foreign tax credit
by filling out the IRS
Form 1118.
Jeffrey Rosensweig, Goizueta Business School, Emory University
You can download tax forms from the IRS Web site: www.irs.gov
Jeffrey Rosensweig, Goizueta Business School, Emory University 