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Author Topic: ITIN help (never been to US)  (Read 2574 times)

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« on: November 03, 2017, 08:17 »
0
I am originally from Finland, but live in Japan now.

As far as I know there is no reason why I should have to pay tax to US as I have never even visited there.

I have tried very hard to understand the actual way how to apply for ITIN which I suppose I need. I even tried to apply it by submitting it in US embassy in Tokyo which ended up costing me 50USD. My application was rejected as I am , surprise, surprise not US citizen.

At this point I just ended up shutting up and paying my tax silently which I have paid thousands and thousands of dollars worth over the years.

Could someone hold my hand and show me the real trick..?


niktol

« Reply #1 on: November 03, 2017, 08:46 »
0
1. I am not a tax lawyer/accountant, so everything that follows is a generalization, not necessarily true in your particular case.

2. You don't need to be a US resident let alone citizen to get ITIN. Not sure why it didn't work out. Are you sure you didn't apply for a Social Security Number by mistake? As far as I can remember you apply for ITIN from IRS, not another US government agency.

3. Typically you don't need to pay US taxes either. Not sure how that came about. There must be some sort of Japan-USA tax treaty. You should read up on it. Depending on the tax treaty between the countries, if you fill out a W8 form, you will be very likely 0% rated on tax deductions by the agency. Then you pay taxes where you typically report them. BTW, even if you were incorrectly taxed because you didn't fill out W8, you can still get that money back from IRS, but you need an ITIN for it.
« Last Edit: November 03, 2017, 09:08 by niktol »

« Reply #2 on: November 03, 2017, 09:14 »
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I've never had any problems with the numbers. Just leave it ITIN space blank.
Check country with 0% tax agreement for royalties. I think it's the W-8BEN Form.
Originally from Canada, live in Finland now.

« Reply #3 on: November 03, 2017, 10:05 »
+2
why I should have to pay tax to US as I have never even visited there

For the same reason I pay tax to Australia through Canva and to the UK through DACS even though I am not from either of those countries.  Since you made money through a US-based company you technically have income from the US regardless of where you live.  With various tax treaties we really shouldn't have to pay those taxes but it is easier for the agencies to just charge us the tax and have us figure it out ourselves later.

I don't know how it will work for you but I just claim back taxes paid to foreign governments on my return and it gets sorted out in the end, although of course I would rather have the money first and pay the taxes later.

Don't know anything about applying for an ITIN - you don't seem to be able to do it online like you can for a regular TIN.  It looks like in Japan you have several places to go but not at the embassy - try one of these (https://www.irs.gov/individuals/international-taxpayers/acceptance-agents-japan).  No idea what they may charge you though.  Good luck!

« Reply #4 on: November 03, 2017, 10:07 »
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I am originally from Finland, but live in Japan now.

Do you pay taxes to Finland or Japan? Are you a Japanese citizen now?

As far as I know there is no reason why I should have to pay tax to US as I have never even visited there.

The IRS will tax you if you get income from a US business, unless you show that you're a citizen of a country that has a tax treaty with US. Both Finland and Japan do.

The reason is that they say so. US tax law.


I have tried very hard to understand the actual way how to apply for ITIN which I suppose I need. I even tried to apply it by submitting it in US embassy in Tokyo which ended up costing me 50USD. My application was rejected as I am , surprise, surprise not US citizen.

As far as I know, you don't need an ITIN. I don't need one. You just need to fill out a W8-BEN form with the right tax numbers. Usually from article 12 (royalties). I don't have the list here now in front of me, but it's likely that both Finland and Japan are at 0%. 5% at the most.

« Reply #5 on: November 04, 2017, 03:48 »
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I am citizen of Finland living in Japan with a visa.

This is what Getty Images states in their tax interview:

It is not necessary to have a TIN in order to determine if you are a US person or non US person for U.S. income tax purposes. However any reduction of the standard withholding rate (30%) that may be available under Treaty will not apply until you can provide either your Foreign or US TIN.

So without a TIN I am paying 30% like I have paid for over 10 years.

Japan has "My number" which is a kind of social security and tax number. But that didn't do last time I tried. As far as I know there is no other taxpayer identification number available in Japan which would suffice as "Foreign ITIN".

I am rather stuck.

submitting the tax interview I got this as email

"To be eligible for treaty benefits you are required to provide either a US Tax Identification Number (TIN) or your country of tax residency Foreign TIN.  "
« Last Edit: November 04, 2017, 03:52 by yaschancool »

« Reply #6 on: November 04, 2017, 04:07 »
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The US only stared accepting foreign tax numbers a few years ago so it could be worth trying again with your japanese number. If you are a Finnish national are you registered for tax there?  Could you use a tax ID from there?

My uk a tax number works fine now for the forms when previously I needed a number from the US.

« Reply #7 on: November 04, 2017, 04:14 »
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Yes, the key here is Foreign TIN.

It should work, and it does for me.

« Reply #8 on: November 04, 2017, 05:41 »
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Thank you kind folks. I was able to find my Japan TIN and at least the form accepted it! Finally..

But I guess getting back the paid tax won't be very easy and still require US Tin..?

« Reply #9 on: November 04, 2017, 05:51 »
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Thank you kind folks. I was able to find my Japan TIN and at least the form accepted it! Finally..

But I guess getting back the paid tax won't be very easy and still require US Tin..?
Don't know if you can to be honest. Never heard of anyone managing that.

« Reply #10 on: November 04, 2017, 06:03 »
+1
Can't you claim it back on your Japanese tax return?  In the US there is a place to get a credit back for foreign tax paid - that's what I do with foreign taxes.  I would assume you can do the same in Japan but have no idea how it actually works there.

niktol

« Reply #11 on: November 04, 2017, 07:19 »
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Thank you kind folks. I was able to find my Japan TIN and at least the form accepted it! Finally..

But I guess getting back the paid tax won't be very easy and still require US Tin..?

easy as pie. But before you do that see if you can get a tax credit in Japan for US taxes. Even if you can, it may not be for the full amount, depending on what kind of treaty there is and the type of income you claim. For example, I would get a credit for the full amount if the money comes from employment in the US, but only for part of it if it comes from a US-connected business.

If you cannot get the tax credit, you would have to file a return with IRS while simultaneously applying for ITIN. You should send all the paperwork together as one package. You will need to file a non-resident alien tax return and supply W7 form with some documentation. Details and instructions are here

https://www.irs.gov/forms-pubs/about-form-1040nr-us-nonresident-alien-income-tax-return

and here

https://www.irs.gov/forms-pubs/about-form-w7

Of course, if your losses are small, all this may not be worth the hassle.



« Last Edit: November 04, 2017, 07:24 by niktol »

« Reply #12 on: November 04, 2017, 07:20 »
+1
But I guess getting back the paid tax won't be very easy and still require US Tin..?

For the last 10 years? I think you can forget about it. Just look forward.  :)

I could be wrong though, so if you find a solution it would be nice to know.

Semmick Photo

« Reply #13 on: November 04, 2017, 12:54 »
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I am Dutch living in Ireland selling through US agencies, I dont have a TIN or ITIN and I dont pay any US tax. All you need to do is fill out a W 8BEN form.

« Reply #14 on: November 04, 2017, 13:46 »
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I am Dutch living in Ireland selling through US agencies, I dont have a TIN or ITIN and I dont pay any US tax. All you need to do is fill out a W 8BEN form.

If you filled out the W8BEN form then you gave them a TIN or ITIN. Without one or the other the W8BEN is not complete.

As Semmick Photo suggested fill in the W8BEN  form and use your Tax Identification Number (TIN) your country issues you. If Finland is a tax treaty country then the tax number issued from Finland will do the trick.

« Reply #15 on: November 06, 2017, 12:10 »
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Can't you claim it back on your Japanese tax return?  In the US there is a place to get a credit back for foreign tax paid - that's what I do with foreign taxes.  I would assume you can do the same in Japan but have no idea how it actually works there.

Yes before that gets lost, that's what I do for the UK taxes. Easier to just deduct from my income instead of filing some long complicated seven page form that has to go to the IRS and then when they approve it gets mailed to the place making payments in the UK. Credit for foreign taxes.

Semmick Photo

« Reply #16 on: November 06, 2017, 16:46 »
0
I am Dutch living in Ireland selling through US agencies, I dont have a TIN or ITIN and I dont pay any US tax. All you need to do is fill out a W 8BEN form.

If you filled out the W8BEN form then you gave them a TIN or ITIN. Without one or the other the W8BEN is not complete.

As Semmick Photo suggested fill in the W8BEN  form and use your Tax Identification Number (TIN) your country issues you. If Finland is a tax treaty country then the tax number issued from Finland will do the trick.
Right, a foreign tax number to the US. I did not know that was abbreviated as TIN


Semmick Photo

« Reply #17 on: November 06, 2017, 16:52 »
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Just checked, the form says Foreign Tax Identifying Number. So F-TIN :)

I thought ITIN and TIN were related to the US tax system. My bad. So I do have a TIN.

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« Reply #18 on: November 06, 2017, 23:18 »
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Yeah, it's just saying if you have these US tax numbers for whatever reason... use those. If not, use your foreign tax ID number.


 

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