I live and work abroad, but my U.S. company is withholding tax. How can I stop this?
You can submit a statement to your employer indicating that you qualify for the foreign earned income exclusion under either the bona fide residence test or the physical presence test and indicating your estimated housing cost exclusion.
If you are U.S. citizen you can submit this statement via Form 673. If you are not a U.S. citizen you can prepare your own statement including information similar to what is reported on Form 673.
Your employer may stop withholding tax once you submit a statement that includes a declaration that the statement is made under penalty of perjury. However, if your employer has reason to believe that you will not qualify for either the foreign earned income or the foreign housing exclusion, your employer may continue to withhold tax.