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Microstock Footage Forum => General - Stock Video => Topic started by: images on June 12, 2016, 23:09

Title: VB withholding tax
Post by: images on June 12, 2016, 23:09
I understand withholding tax as only applying to US sales. That's the way all the agencies treat it at least. VB are applying withholding tax to ALL sales. It could be that all my sales are US based there but seems unlikely. Has anyone else who gets tax withheld noticed this?
Title: Re: VB withholding tax
Post by: click_click on June 13, 2016, 01:12
If you provided a W-8BEN don't worry. They are switching (still) their accounting system so some sales may show a withholding tax deducted but according to their support it will be corrected for the payouts.

So if you had 0% withholding before it will stay the same.
Title: Re: VB withholding tax
Post by: Tror on June 13, 2016, 05:28
Entrepreneurs should stop incorporating in the US. Way too much effort accountancy wise and - at least - uncomfortable for contributors. For me it is even already a criteria if I upload to a new site or not.
Title: Re: VB withholding tax
Post by: cfhdesign on June 13, 2016, 12:51

I noticed the same problem a few months ago and I contacted VB.

Basically, I live in a country that doesn't have a treaty with the US, so I pay 30% withholding on all US based sales (this is on SS, FT etc).  On VB, their policy is ANY sales, no matter where in the world the client is, is deemed to be US income and subject to withholding at 30%.

I did some looking around on the IRS website and it seems to me that only royalty sales where the usage is WITHIN the US should be deemed "US Source income", for sales originating OUTSIDE the US, the income should be "Foreign Source" and not subject to withholding.  This is the system Fotolia and Shutterstock uses (and some others).

I pointed this out to VB (and mentioned that if it is good enough for SS and Fotolia, it should be good enough for them) and was told they would speak to their finance department about it, they were very polite, but in the end, nothing changed.

So, for me,  I have to pay 30% to the US government for sales on VB, no matter where in the world the client purchases it.  This I think is wrong, but they will not change their policy.
Title: Re: VB withholding tax
Post by: Belish on June 13, 2016, 15:28
Same here. I'm writing to them.