pancakes

MicrostockGroup Sponsors


Author Topic: 30% of Royalties Withheld!  (Read 3143 times)

0 Members and 1 Guest are viewing this topic.

« on: March 20, 2013, 05:19 »
0
Being a non-US citizen, I just received an e-mail from Shutterstock on the mandatory submission of a tax form, and that failure to do so will result in a 30% witholding tax.

I'm still pretty green to microstock (and heck, to overseas transactions in general) so I decided to do a little research. To my horror, I discovered that the country I'm from (Singapore) does not have any tax treaties with U.S.  :o Unless I'm reading it wrong, does this mean that I can't do anything but forfeit 30% of my royalties? Do I even need to file the tax form when I'll be penalized the full amount anyway?

UPDATE: I just found a thread on the Shutterstock forums that serves as a comprehensive FAQ (http://submit.shutterstock.com/forum/viewtopic.php?p=947605#947605). Seems like it's a pretty old issue. Thanks to all who replied to this thread - I now have all the answers I need!
« Last Edit: March 20, 2013, 07:20 by davidgoh »


michealo

« Reply #1 on: March 20, 2013, 05:29 »
0
If your income warrants it you could set up a company in a jurisdiction that has a tax treaty with the US and your country.

vlad_the_imp

« Reply #2 on: March 20, 2013, 05:55 »
0
Quote
failure to do so will result in a 30% witholding tax

I don't know about Singapore, but in the UK the rule is you can only be taxed once on income, so if you are a UK citizen and you are paid ( as I am from Getty)your income minus US tax, then you are not taxed again on that income in the UK. It may be that I might pay a little less tax in the UK if I received my Getty income untaxed, but it's a small price to pay, getting my income taxed, and not having to fill in the US tax exemption form ( have you seen that thing?) Singapore may be the same as UK, you'd have to look into it.

michealo

« Reply #3 on: March 20, 2013, 06:05 »
0
That is because the US and the Uk have a dual taxation agreement.

gillian vann

  • *Gillian*
« Reply #4 on: March 20, 2013, 06:52 »
0
well if your nation has no tax treaty then yes, that's the reality.

« Reply #5 on: March 20, 2013, 07:09 »
+1
If your income warrants it you could set up a company in a jurisdiction that has a tax treaty with the US and your country.

I suppose this is the only way out, isn't it? I guess lucky in that I'm trying to get my first and last ever payout from Shutterstock, as I recently deactivated my port in favour of exclusivity in iStock. The amount in question is small ($77), so it's not so bad still... Just came as a nasty shock. :P It now also feels like I have less reason to ever go back to being non-exclusive, given that if I do, my potentially 2nd or most lucrative site would suffer a 30% cut all the time. :/

Regardless, thanks for the reply. :)

Quote
failure to do so will result in a 30% witholding tax

I don't know about Singapore, but in the UK the rule is you can only be taxed once on income, so if you are a UK citizen and you are paid ( as I am from Getty)your income minus US tax, then you are not taxed again on that income in the UK. It may be that I might pay a little less tax in the UK if I received my Getty income untaxed, but it's a small price to pay, getting my income taxed, and not having to fill in the US tax exemption form ( have you seen that thing?) Singapore may be the same as UK, you'd have to look into it.

That is because the US and the Uk have a dual taxation agreement.

Aye, what Michealo said. Seems like Singapore's a bad place to be doing stock from. :(

tab62

« Reply #6 on: March 20, 2013, 09:26 »
0
speaking of which, what about Germany and the USA? I read the form from Panthermedia it appears there is no tax treaty thus nailed with 15%

Noedelhap

  • www.colincramm.com

« Reply #7 on: March 20, 2013, 10:32 »
0
That sucks, having to give away 30% of your income to the US. I have the luck that I live in a country that has a 0% tax treaty with the US, but it's ridiculous either way.

michealo

« Reply #8 on: March 20, 2013, 11:14 »
0
speaking of which, what about Germany and the USA? I read the form from Panthermedia it appears there is no tax treaty thus nailed with 15%

Germany does have a tax treaty with the US however I think this is from my understanding an additional mandated minimum tax by the German Government.

michealo


« Reply #10 on: March 20, 2013, 12:39 »
0
if there is a legal way to avoid the 30% tax?


aspp

« Reply #11 on: March 20, 2013, 13:26 »
0
I can understand for the moment why these taxes are deducted from ordinary sales. Though I think it is crazy that non US citizens should be expected to pay US taxes. But I do not understand why this tax is deducted from subscription sales. I do not see why it needs to be. As follows:

The US based agency sells a subscription to the US based client - the point of sale for that transaction is clearly the US. No argument there.

But I would have thought that the accounting processes could be re-configured such that the transaction which takes place between the agency and the photographer happens where the photographer is based  - with some sort of system of billing under which the agency would report sales and the non US photographer would raise an invoice (the whole thing could be automated).

The photographers are not selling the use of their images to the clients. The clients are buying a subscription. It is the agencies which are paying to use the images as part of their subscription offerings. In which case I am not convinced that transaction either is or needs to be US based.

« Reply #12 on: March 20, 2013, 19:42 »
0
I think it is only US sales are taxed with the 30%..usually in the payment details..it shows an amount of US sales and the tax..

back to the question..is there a way to avoid the tax legally?

someone mention to set up a company..does it mean to get tax in our own country instead of US?

anyone know details?

« Reply #13 on: March 20, 2013, 21:06 »
0
I think it is only US sales are taxed with the 30%..usually in the payment details..it shows an amount of US sales and the tax..

back to the question..is there a way to avoid the tax legally?

someone mention to set up a company..does it mean to get tax in our own country instead of US?

anyone know details?

Yes, thankfully only US sales get taxed. It goes by country of residence, not passport nationality. Setting up a company in a tax-treaty country will involve considerable expense on a continual basis. It's only worth it if you are big stock earner.

« Reply #14 on: March 21, 2013, 04:02 »
0
oic..i wonder will my country start tax-treaty with US one day?

My US sales in shutterstock isn't that big portion like in some sites..sites like bigstock and veer got more US sales..

Overall..it is still quite an amount after few years.

If i resident in another country with tax-treaty, can I change my tax profile?



I think it is only US sales are taxed with the 30%..usually in the payment details..it shows an amount of US sales and the tax..

back to the question..is there a way to avoid the tax legally?

someone mention to set up a company..does it mean to get tax in our own country instead of US?

anyone know details?

Yes, thankfully only US sales get taxed. It goes by country of residence, not passport nationality. Setting up a company in a tax-treaty country will involve considerable expense on a continual basis. It's only worth it if you are big stock earner.


 

Related Topics

  Subject / Started by Replies Last post
4 Replies
3298 Views
Last post November 07, 2009, 20:24
by Dreamframer
55 Replies
17628 Views
Last post August 17, 2010, 16:57
by cmcderm1
2 Replies
1247 Views
Last post April 06, 2016, 02:15
by thepokergod
4 Replies
2199 Views
Last post May 17, 2016, 22:48
by Ronib
6 Replies
1662 Views
Last post October 16, 2017, 22:53
by SpaceStockFootage

Sponsors

Microstock Poll Results