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There are many ways in which the US tax system is very different from most countries. EG the USA taxes its citizens on worldwide income even if they are permanently living outside of the US.

Just got another email now:

We have two important updates on the issue of tax withholding and your Shutterstock earnings:

First, to all foreign submitters worldwide, regardless of location:

Following extensive consultation with tax counsel, Shutterstock will withhold taxes on U.S. Source Income only, generally defined as income from Shutterstock’s U.S. customers. As many of you know by now, that percentage can be as high as 30% in Non-Treaty Countries and as low as 0% in certain so-called “Treaty Countries.” If you live in a Treaty Country, then to receive the benefit of the reduced withholding rates, Shutterstock must have an appropriate Form W-8 and your ITIN on file.

Second, to all submitters who are residents of a Treaty Country:

Some submitters have reported to us that IRS officials have said that the letter emailed by Shutterstock to you will not satisfy the requirement that you furnish “a signed letter or document from the withholding agent, on official letterhead, showing your name and account number, and evidencing that an ITIN is required to make distributions to you during the current tax year which are subject to IRS information reporting or federal tax withholding.” Some IRS officials appear to be claiming that the letter is not sufficient without a physical signature. While we have been advised that the letter provided will satisfy the IRS’ document requirement, we are in the process of investigating this issue further and hope to have an update for you next week. Until you have heard from us again, please do not submit your W-7 ITIN application.

To reiterate, we will contact you soon with detailed instructions on how to submit your W-7 ITIN application, and again when the Form W-8 is available digitally on submit.shutterstock.com.

Thank you for your cooperation and attention to this matter.

Best Regards,

Shutterstock Images LLC

the internet has nothing to do with this,  W-8BEN and the rest were required a long time ago. Long before the internet was the preferred method of picture buying. I'm surprised it's taken the US micros so long  to twig onto this. Other countries do this too. I have  to supply signed documents to a Spanish agency so they don't keep a bunch for tax on their end.

me too... and I am sure glad I have these forums to help sort it all out

I don't think Al Gore would of got very far without the invention of Alexander Graham Bell.  Perhaps the Scottish should reap the rewards of the telecom industry

But SS could absorb the tax themselves, I'm sure Jon probably hasn't realised how many cointributors are going to pull their portfolios and leave, a lot of people will not provide personal info to the US govt and those that live in countries without a tax treaty will be double taxed so why would they keep submitting, new submitters will also think twice before joining.

Jon should use his head and incorporate SS in another country.

Have you read the post by Sharpshot above?   New info about this

On SS the rant continues apparently.  I guess it takes a while for the info to get trough. 

Hmmmm. Ok so there´s still problems.   There´s quite alot of US buyers I guess.

Let´s hope we get a good explanation soon, from their consultants.

Non US contributors are great majority of all contributors. 

One aspect of this thing is much bigger than shutterstock.  If the US tax department makes it difficult to do international business over the internet, and if the only way to do so is to provide private information... then this debate is going to grow beyond photography forums.

This was never just about losing personal income. For many it has a significant ethical and political dimension. 

Absolutely __ well said. The hysterical outbursts were ridiculous.

No, it's not that new. We were first informed about the impending requirement for Form W8 (for non-US contributors) in an update to the ToS back in January this year. This just happens to be the first time that we've been given the numbers of how much tax will be applied and a deadline by which to comply.

I must admit I've got sympathy for those individuals living in countries that do not have an agreement with the US though.

Australia does this too. It also considers a company solely directed and run by an Australian to be an Australian regardless of where the company is incorporated (ie if the company was set up in a tax haven, it is still an Australian Company).  Apparently quite a number of countries have withholding tax on various industries where use of tax havens etc is high.