If you're paying a foreign person directly - you submit form 1099 and form 1042 and you withhold the default (30%) amount unless the person gives you a W8 with a valid treaty claim and tax id. If so - you withhold based on the treaty rate.

I'd suggest to clarify this with a licensed tax adviser (EA/CPA licensed in your State) who's familiar with this kind of issues, and not rely on free advice on the Internet or DIY.

If you're paying a foreign person directly - you submit form 1042 and you withhold the default (30%) amount unless the person gives you a W8 with a valid treaty claim and tax id. If so - you withhold based on the treaty rate.

From the IRS:

General Rule

In general, a person that makes a payment of U.S. source income to a foreign person must withhold the proper amount of tax, report the payment on Form 1042-S and file a Form 1042 by March 15 of the year following the payment(s).

I'd suggest to clarify this with a licensed tax adviser (EA/CPA licensed in your State) who's familiar with this kind of issues, and not rely on free advice on the Internet or DIY. Specific cases require specific advice and while the general rule above holds in most cases - in some there are exceptions.