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Author Topic: Withholding tax  (Read 3169 times)

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« on: February 14, 2017, 22:19 »
0
According to the tax e-mail from Canva, one can claim back the withholding tax in one's country. Does this apply to other agencies US withholding tax too?



« Reply #1 on: February 14, 2017, 22:29 »
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I'm no expert, but I think it's irrelevant for most other agencies because they don't  withhold anything.  The exception is DAX, who take out 30% for Britain, and the Envato charges, but those are not foreign taxes just expenses.  So it will be Canva and DAX for me, plus a separate listing of expenses for Envato.

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« Reply #2 on: February 14, 2017, 23:09 »
+2
According to the tax e-mail from Canva, one can claim back the withholding tax in one's country. Does this apply to other agencies US withholding tax too?

If your country has a tax treaty with the US then you can offset the tax you've had withheld, against the tax you have to pay in your own country. It's not like they'll send you a cheque or anything, you'll just get a discount on what you're due. Exactly how you do that will vary depending on where you're from, so you should speak to an accountant.

As for 30% for Britain... the tax treaty with the US has a 0% withholding rate, so if you've submitted a W8 with your foreign tax ID (Unique Taxpayer Reference or National Insurance number), then they shouldn't be withholding anything.

« Reply #3 on: February 15, 2017, 01:09 »
+1
According to the tax e-mail from Canva, one can claim back the withholding tax in one's country. Does this apply to other agencies US withholding tax too?

If your country has a tax treaty with the US then you can offset the tax you've had withheld, against the tax you have to pay in your own country. It's not like they'll send you a cheque or anything, you'll just get a discount on what you're due. Exactly how you do that will vary depending on where you're from, so you should speak to an accountant.

As for 30% for Britain... the tax treaty with the US has a 0% withholding rate, so if you've submitted a W8 with your foreign tax ID (Unique Taxpayer Reference or National Insurance number), then they shouldn't be withholding anything.

not correct they are withholding 10% for US contributors

https://support.canva.com/contributors/managing-payouts/contributor-royalties/
« Last Edit: February 15, 2017, 01:12 by PhotoBomb »

« Reply #4 on: February 15, 2017, 01:44 »
+2
The are an Australian not a US company so they keep 10% for UK contributors. Is there anyone with experience claiming this back? Not sure how it works.

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« Reply #5 on: February 15, 2017, 03:26 »
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Ah right, just assumed it was US withholding. Sorry!

« Reply #6 on: February 15, 2017, 03:42 »
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OK, so if there is no tax treaty, then the money cannot be claimed back? Not a single agency is clear about this. Canva is the first one to mention claiming back funds.

« Reply #7 on: February 15, 2017, 03:58 »
+1
Managed to track it down for yhe UK. There's a place on the tax return you declare the income then you get some or all of it back as tax relief.

« Reply #8 on: February 15, 2017, 04:08 »
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I'll check if there is a column for that on the forms here.

On a side note, one would have to get tax back from VB as they apply withholding tax to every sale, so I should be able to get back the full 30% on all non-US sales. In theory...

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« Reply #9 on: February 15, 2017, 04:09 »
+1
OK, so if there is no tax treaty, then the money cannot be claimed back? Not a single agency is clear about this. Canva is the first one to mention claiming back funds.

I guess they don't want to leave themselves liable to any possible issues if giving out tax advice. I'd be surprised if your country's tax authority would take into account taxes paid to a country that they don't have a tax agreement with... but you never know.

Do you live in Taipei? I just had a quick Google search, and I could be wrong (so don't get your hopes up!), but worth looking into... from the info below, it seems like Taiwan doesn't have a double taxation treaty, but Taipei might. Bit weird, but hey ho:

ttp://www.treasury.gov.au/Policy-Topics/Taxation/Tax-Treaties/HTML/Income-Tax-Treaties

« Reply #10 on: February 15, 2017, 04:11 »
+1
If there is a tax treaty when you pay your taxes in the country where you are a resident you can deduct the amount of money that was withholded from the amount of the taxes that you have to pay in your country. You just have to attach the document that you have for the taxes withholded. This is the idea of Double Taxation Agreements (DTA) - to avoid being double taxed.

When there is no DTA between the two countries you have to ask the TAX authorities in the country where you are resident and pay your taxes if they will deduct the withholded amount or part of it from the taxes you have to pay. If the withholding rate is 30% for you (in most countries where there is no DTA this is the rate) and then you have to pay 15% taxes in your country it is possible that you can deduct the withholded amount from the amount the you have to pay and finally you will pay nothing in your country. But you should ask your authorities.

The worst case is when you were at 30% withholding rate and then in your country you have to pay taxes again. Painful.

« Reply #11 on: February 15, 2017, 04:23 »
0
OK, so if there is no tax treaty, then the money cannot be claimed back? Not a single agency is clear about this. Canva is the first one to mention claiming back funds.

I guess they don't want to leave themselves liable to any possible issues if giving out tax advice. I'd be surprised if your country's tax authority would take into account taxes paid to a country that they don't have a tax agreement with... but you never know.

Do you live in Taipei? I just had a quick Google search, and I could be wrong (so don't get your hopes up!), but worth looking into... from the info below, it seems like Taiwan doesn't have a double taxation treaty, but Taipei might. Bit weird, but hey ho:

ttp://www.treasury.gov.au/Policy-Topics/Taxation/Tax-Treaties/HTML/Income-Tax-Treaties

Thanks for that. I'll look into it. I am in Taipei. I suspect that the AU site just lists Taiwan as Taipei for political reasons, but it's worth checking out.

« Reply #12 on: February 15, 2017, 04:25 »
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If there is a tax treaty when you pay your taxes in the country where you are a resident you can deduct the amount of money that was withholded from the amount of the taxes that you have to pay in your country. You just have to attach the document that you have for the taxes withholded. This is the idea of Double Taxation Agreements (DTA) - to avoid being double taxed.

When there is no DTA between the two countries you have to ask the TAX authorities in the country where you are resident and pay your taxes if they will deduct the withholded amount or part of it from the taxes you have to pay. If the withholding rate is 30% for you (in most countries where there is no DTA this is the rate) and then you have to pay 15% taxes in your country it is possible that you can deduct the withholded amount from the amount the you have to pay and finally you will pay nothing in your country. But you should ask your authorities.

The worst case is when you were at 30% withholding rate and then in your country you have to pay taxes again. Painful.

Currently, I think I am paying the 30% and then extra tax because my earnings from Paypal get declared when I transfer them to the bank.

« Reply #13 on: February 15, 2017, 04:33 »
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Paypal and banks fees are something different - but I agree they are not small - additional 3-4%.

You can't avoid the first 30% and Paypal fees. The question is at least to pay minimum taxes in your country.

outoftheblue

« Reply #14 on: February 15, 2017, 06:27 »
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The are an Australian not a US company so they keep 10% for UK contributors. Is there anyone with experience claiming this back? Not sure how it works.


The tax treaty between United Kingdom and Australia has a 5% witholding rate since Amendment Bill 2003, effective July 2004 but Canva detract 10% nonetheless. Can someone please tell them? I contacted them but no reply.

Please see here:

"- reducing the withholding tax rate on royalties from a maximum of 10% to 5% of the gross royalty payment;"

http://www.austlii.edu.au/cgi-bin/sinodisp/au/legis/cth/bill_em/itaab2003389/memo1.html?stem=0&synonyms=0&query=international%20tax%20agreements

Edit: Thanks "Justanotherphotographer" for finding the link to the actual approved treaty from an official source (UK gov):

https://www.gov.uk/government/publications/australia-tax-treaties

See article 12.

« Last Edit: February 15, 2017, 08:34 by outoftheblue »

Mir

« Reply #15 on: February 15, 2017, 07:04 »
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Does it matter whether you are a physical or juridical person ?

« Reply #16 on: February 15, 2017, 07:35 »
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Individual or company - no difference for the withholding tax rate.

But if you are a company you should pass some tests for LOB (Limitations of benefits). If you do not pass them you are not eligible for the benefit. Benefit is to have 10% withholding rate instead of 30%.

For example the first test is if you are the sole owner of the company are you a resident of the country where the company is registered. If you are not - the DTA benefits do not apply for the company.


« Reply #17 on: February 15, 2017, 07:41 »
+1
The are an Australian not a US company so they keep 10% for UK contributors. Is there anyone with experience claiming this back? Not sure how it works.


The tax treaty between United Kingdom and Australia has a 5% witholding rate since July 1, 2003 (Amendment Bill 2003) but Canva detract 10% nonetheless. Can someone please tell them? I contacted them but no reply.

Please see here:

"- reducing the withholding tax rate on royalties from a maximum of 10% to 5% of the gross royalty payment;"

http://www.austlii.edu.au/cgi-bin/sinodisp/au/legis/cth/bill_em/itaab2003389/memo1.html?stem=0&synonyms=0&query=international%20tax%20agreements

Do you know if that bill was passed? Do you have a link to an Australian government site?

ETA: never mind found it. You are correct they should only be withholding 5%
https://www.gov.uk/government/publications/australia-tax-treaties
« Last Edit: February 15, 2017, 07:43 by Justanotherphotographer »

« Reply #18 on: February 15, 2017, 07:45 »
+1

outoftheblue

« Reply #19 on: February 15, 2017, 07:56 »
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Have you tried these email addresses?

http://www.microstockgroup.com/canva/canva-email-address/


Thanks, I will email them and post here if they reply.

« Reply #20 on: February 15, 2017, 08:17 »
+2
That could be a huge amount of money for all of us.  Hope they go to 5% or give us a good explanation why it's 10%.

« Reply #21 on: February 15, 2017, 09:31 »
+1
That could be a huge amount of money for all of us.  Hope they go to 5% or give us a good explanation why it's 10%.
I think they were just using an outdated treaty. It is pretty clearly stated in the link I posted and that's the current treaty.

outoftheblue

« Reply #22 on: February 16, 2017, 02:33 »
+1
That could be a huge amount of money for all of us.  Hope they go to 5% or give us a good explanation why it's 10%.
I think they were just using an outdated treaty. It is pretty clearly stated in the link I posted and that's the current treaty.

That's my opinion too.

Problem is they ARE - not WERE - using an outdated treaty: they already applied 10% withholding to January earnings and they'll soon apply it again to February unless someone checks.

PS: No replies to my emails for now (except an automatic reply from Lee saying he's on leave until Feb 27th).

« Reply #23 on: February 16, 2017, 03:20 »
+2
I hope they sort it soon and repay previous months.
« Last Edit: February 16, 2017, 05:12 by Justanotherphotographer »

« Reply #24 on: February 17, 2017, 03:16 »
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If I understand this information from KPMG correctly, then there is no way to do it.

Relief for foreign taxes

Is there any Relief for Foreign Taxes in Taiwan? For example, a foreign tax credit (FTC) system, double taxation treaties, and so on?

Under the regular tax, there is no relief for foreign taxes allowed for foreign expatriates. However, if the resident pays alternative minimum tax due to the inclusion of his/her offshore income, he/she may claim the foreign tax credit given that the supporting documents are submitted.


 

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