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Agency Based Discussion => Shutterstock.com => Topic started by: Magnum on May 27, 2009, 14:54

Title: IRS Withholding Taxes for non U.S. Submitters
Post by: Magnum on May 27, 2009, 14:54
Can anyone friendly please explain this.   I´m to tired to understand. I just got a headache.

In the countrylist it says:  Sweden 0% 0%

so?  They will withold 0%.    Do I need to do anything?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: borg on May 27, 2009, 14:58
I am in Croatia...
And my country isn't on list....

Does it mean that SS will take me huge 30 % of my earnings...

What can I do!????
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Magnum on May 27, 2009, 15:09
I am in Croatia...
And my country isn't on list....

Does it mean that SS will take me huge 30 % of my earnings...

What can I do!????

Do the paperwork I guess.

Why´d they need to leave us with ????      They will be bombarded with mails...
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Bateleur on May 27, 2009, 15:14
As  understand it (as British Citizen who has never been to the USA and is a resident of Switzerland, also 0%) we are required to:

1)  Obtain a 'U.S. Individual Taxpayer Identification Number (ITIN)'. This can take 4-6 weeks.

2)  Then, with this number, fill in the U.S. Internal Revenue Service (IRS) Form W-8BEN

3)  Once these things have been done and approved we will be granted the 0% tax status. But, until steps 1 and 2 have been completed we will be subject to a 30% Withholding Tax.

Please correct me, someone, if I'm wrong.

I object to this most strongly.

I know that the USA considers that it rules the world, but I fail to see why I should give the US authorities the details they require. I have no connection whatsoever with the country and my personal details are none of their business. No other country has the gall to do this.

I am very seriously considering closing my Shutterstock account. It will be tough, as it is one of my better earners, but I'll find other agencies in other countries - countries that don't act in such a high-handed way - and that will make up for it.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: borg on May 27, 2009, 15:21
http://submit.shutterstock.com/forum/abt62243.html  (page bottom)

It seems to me that if the country is not on this list, they take us 30% with or without paperwork...

Please correct me if I am wrong!!!!!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: madelaide on May 27, 2009, 15:24
There is another site with this, if I remember it correctly.

As SS is based in USA, you are earning money there and their government taxes that. There are countries with a agreement that you can compensate taxes taken in one country when making your own tax reports.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Bateleur on May 27, 2009, 15:25
[url]http://submit.shutterstock.com/forum/abt62243.html [/url] (page bottom)

It seems to me that if the country is not on this list, they take us 30% with or without paperwork...

Please correct me if I am wrong!!!!!


That's what it looks like, unfortunately. You're going to lose a third of your income to the Government of country with which you have no connection (I'm guessing).
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Magnum on May 27, 2009, 15:36
The war has started:

http://submit.shutterstock.com/forum/abt62245.html
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: borg on May 27, 2009, 15:47
The war has started:

[url]http://submit.shutterstock.com/forum/abt62245.html[/url]


We shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills; we shall never surrender...
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Phil on May 27, 2009, 15:51
The war has started:

[url]http://submit.shutterstock.com/forum/abt62245.html[/url]


We shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills; we shall never surrender...



LOL!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: travelstock on May 27, 2009, 15:52
Ok.. so I'm a resident of Australia - currently traveling. Assuming I get the paperwork done I still have 5% deducted that goes to the US government? Is there any way of getting this back?

I pay taxes in Australia - and now I'm supposed to pay another 5% in the US? Is this some sort of joke?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Talanis on May 27, 2009, 15:55
Magnum, from what I understand, if you do the paperwork, you will have 0% witholding but if you don't do it, they will keep 30% and send it to the IRS. That is serioulsy pissing me off. The cost of a notarized copy of the passport I don't have would cost probably over 600$ up here in Canada. Combine that with the sales drop in the last couple of months and I'm seriously thinking about closing my account there.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Xalanx on May 27, 2009, 16:03
Is this some sort of joke?

it's no joke. it's obama and his groupies.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: dbajurin on May 27, 2009, 16:11
I am from Croatia also. So there is just one option for us. Closing account  >:(
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Phil on May 27, 2009, 16:15
Ok.. so I'm a resident of Australia - currently traveling. Assuming I get the paperwork done I still have 5% deducted that goes to the US government? Is there any way of getting this back?

I pay taxes in Australia - and now I'm supposed to pay another 5% in the US? Is this some sort of joke?

to my limited understanding, it goes on your tax return as tax payed in another country on your ss income.  of course if the tax office says your a hobby then ss income doesnt appear on tax return and whether you can get it back I dont know.  to my thinking, all future tax returns will have  to be done by an accountant if nothing else but to minimise the chnace of audit (sounds like factors will trip the audit flag to me).

I'll have to go see my accountant soon :(

Phil
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: litifeta on May 27, 2009, 16:30
There have been plenty of posts about this before. Yes, I just got notification before, so it is my fault I never did anything about this until I got the email.

The issue I have is the ATO in Australia does not have a door that swings both ways. It makes a decision on one thing, and then reverses the interpretation when it suits you.

A few years ago I had a web business that was struggling. They deemed that because it made less than $20k p/a it was a hobby, therefore I could not claim my costs.

And you wait, when they receive notification from the US you have paid taxes there, try and claim it is a hobby from an income perspective.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: PeterChigmaroff on May 27, 2009, 16:38
Is this some sort of joke?

it's no joke. it's obama and his groupies.

Don't be silly. It has nothing to do with Obama, Bush or Franklin. You are allowed to pay taxes in your country of residency if there is a double taxation agreement between the countries. In most cases this defaults to paying 0% in USA then claiming earnings in your country of residency. I believe I got a ITIN during the Bush One admin.


Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: nata_rass on May 27, 2009, 16:42

 >:(

No words
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: gostwyck on May 27, 2009, 16:47

We shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills; we shall never surrender...


I'm surprised and impressed that a young man from Croatia is familiar with Churchill's speeches from 60-odd years ago.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: sharpshot on May 27, 2009, 16:49
Is this some sort of joke?

it's no joke. it's obama and his groupies.

LOL, does he get blamed for everything now?  This was going on with other US companies long before he became president.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: sharpshot on May 27, 2009, 16:52
I hope SS can open up an office in Europe and pay us from there.  I will fill in the forms if I have to but there should be a better solution.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: borg on May 27, 2009, 16:56

We shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills; we shall never surrender...


I'm surprised and impressed that a young man from Croatia is familiar with Churchill's speeches from 60-odd years ago.

Oh!

This is a fabulous speech, and it would be a shame to me,if I've never heard  ...
We are very globalized nation with an extensive general culture...

Also comrade Stalin would say: Closing of a one microstock portfolio is a tragedy,but closing of million portfolios is just statistics...
 ;) :D

Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Magnum on May 27, 2009, 17:02
Magnum, from what I understand, if you do the paperwork, you will have 0% witholding but if you don't do it, they will keep 30% and send it to the IRS. That is serioulsy pissing me off. The cost of a notarized copy of the passport I don't have would cost probably over 600$ up here in Canada. Combine that with the sales drop in the last couple of months and I'm seriously thinking about closing my account there.


Notarized copy of passport !   Is that serious?

All unemployed in the US. Send application to the IRS. They´re about to hire cause of witchhunt of microstockers :o
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Oldhand on May 27, 2009, 17:03
Double indemnity taxation - I live in the UK, so if I do nothing, it will be 0% withheld as that is the current tax agreement. It is up to me to declare income in the UK earned overseas. You don't pay tax on income twice. (US/UK).

If I lived in somewhere such as Croatia with no taxation agreement, I am due to pay 30% to the US government, and then still pay tax on my earings to Croatia as there is no agreement.

Reading Shutterstocks statement, it seems they are liable for any tax due on payments made by them to us prior to this announcemet.

"Do I owe any U.S. withholding taxes on my earnings from Shutterstock for previous months?

No. If U.S. withholding tax should have been withheld from prior Shutterstock payments to you, Shutterstock is responsible for those withholding taxes. "

They are getting their house in order, no doubt after accountancy and legal advice.

Oldhand
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Magnum on May 27, 2009, 17:18
I vote for Oldhands theory.   You mean if it´s 0% for your country. do nothing. Right? seems logic.   
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: sharpshot on May 27, 2009, 17:26
Reading through the SS forum thread, this look like a complete mess.  As none of the other US based sites ask for this, I can't see many people doing it just for shutterstock.  They will have to explain why they need the ITIN number when I know other US companies just ask for a W-8BEN form to be filled in every few years.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: dk on May 27, 2009, 17:34
- Pay your rates
- I'll pay tomorrow!

http://www.youtube.com/watch?v=wWkpL8vSQ7Y

 ;D
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: PeterChigmaroff on May 27, 2009, 17:47
Reading through the SS forum thread, this look like a complete mess.  As none of the other US based sites ask for this, I can't see many people doing it just for shutterstock.  They will have to explain why they need the ITIN number when I know other US companies just ask for a W-8BEN form to be filled in every few years.

Macro agencies have had to deal with this for years. i can't think of one that hasn't asked for a w-8BEN form. The form requires either a ITIN or EIN to be valid. It is probably something that will catch up with all US based micros as the default to collect tax will probably land on the micros door. If they don't collect it doesn't mean they shouldn't have and may be liable for it or a fine. My advice is get the number. As far as I can tell you never actually have to deal with the IRS after that. It's a simple enough process and once complete your good to go. W-BEN takes a minute to fill out and that's it. I don't think I have gotten asked for a second one from anybody. They don't seem to expire. The idea of paying 30% or higher to Uncle Sam, who is not even my cousin, doesn't sit right with me and this makes it all very legal and complete.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Milinz on May 27, 2009, 17:49
AND - IT IS LOCKED NOW!

 ;D
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: MAF on May 27, 2009, 17:57
Sounds reasonably painless - thanks for the info Zeus.  Guess I get a number.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: stokfoto on May 27, 2009, 18:34
ok,that seriously made me think closing my account I hope they will sort this out somehow! ??? ??? ???
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Lizard on May 27, 2009, 19:30
Oh , nice , Im in doubt , to leave Croatia or close the my SS account.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: phildate on May 27, 2009, 19:34
I can't see why they couldn't just prepare an email for submitters from each country explaining clearly what was needed from us. I don't have time to wade through pages of forum posts or the IRS website.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: michaeldb on May 27, 2009, 19:40
Is this some sort of joke?

it's no joke. it's obama and his groupies.
Don't be silly. It has nothing to do with Obama...
Obama is the new Bush. I for one welcome our new Obama groupie overlords. Foreigners Beware: After seizing your SS revenues, Obama's next step will be to start waterboarding all of you. :-*
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: goldenangel on May 27, 2009, 19:46
Double indemnity taxation - I live in the UK, so if I do nothing, it will be 0% withheld as that is the current tax agreement.
You still need to file form W-8BEN to let SS and IRS know that you are from the UK and that you are claiming the benefits of the US/UK tax treaty.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Lizard on May 27, 2009, 19:48
Im not an accountant and I just came from a concert so I'm not in the best for for thinking , but one thing comes to my mind

With this logic , don't all those countries where the buyers are from have the same rights as US in this case , and are also entitled to their part of the cake from all the cumulative fee that left their borders from its citizens pockets.

Also , if we, that provide free images to SS , (cause we are not payed for the upload) have to pay taxes to US where SS is based , with same logic SS would have to pay part of its income that came from our images to our governments the same way as we do ?

Why would SS avoid double taxes and we don't , or why would US have more rights than other countries in this case ?  
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: goldenangel on May 27, 2009, 19:52
I can't see why they couldn't just prepare an email for submitters from each country explaining clearly what was needed from us. I don't have time to wade through pages of forum posts or the IRS website.
They have given a list of countries where tax treaty applies. If you are from one of those countries, you need to file the form. If not, you don't need to do anything but 30% will be taken from each check.

Depending on your total income from US sources, this 30% should be something recoverable if you file a tax return with the US in April each year. Now, THAT can be a bit of work, although there are tax programs and online pages to help with that.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: cidepix on May 27, 2009, 20:05
I am paying taxes in the UK. And apparently if I fill these forms I won't pay anything to US authorities.

But why all the hassle? Unbelievable! Why can't I just get a letter from Inland Revenue in the UK or basically a letter from my accountant, or paperwork that shows I already pay taxes in the UK.

Why all the BS!?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: goldenangel on May 27, 2009, 20:20
I am paying taxes in the UK. And apparently if I fill these forms I won't pay anything to US authorities.

But why all the hassle? Unbelievable! Why can't I just get a letter from Inland Revenue in the UK or basically a letter from my accountant, or paperwork that shows I already pay taxes in the UK.

Why all the BS!?
Yeah, these things should really be automatic. If one has their address in the UK. SS should be able to do it for them. But then, bureaucracy never made sense anyway....
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: click_click on May 27, 2009, 20:25
It's interesting to see the people who were bashing the smaller Micro sites the other day now considering leaving the big old SS...

How things can change in a heart beat. Guess there is no good Micro agency after all...???
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: null on May 27, 2009, 20:46
I got the mail too. I need to go to Paris or Frankfurt to get my paperwork certified, as Belgian citizen but living in the Philippines. No thanks. After many hours shooting, sweating, reducing noise, uploading, paying my internet - this is what you get. I can't do their TIN or whatever Red Tape physically. So my earnings on SS wil go down from 0.33$ to 0.22$ by legal theft. If they go through with this, I'll cancel my account too. Since I didn't upload to SS since last March, my monthly income there went down by 2/3 and I'm roughly at the same income as 2-3 years ago with half my port now. Sad to say, I'd better flip hamburgers or go on with commissioned.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: goldenangel on May 27, 2009, 20:56
I got the mail too. I need to go to Paris or Frankfurt to get my paperwork certified, as Belgian citizen but living in the Philippines. No thanks. After many hours shooting, sweating, reducing noise, uploading, paying my internet - this is what you get. I can't do their TIN or whatever Red Tape physically. So my earnings on SS wil go down from 0.33$ to 0.22$ by legal theft. If they go through with this, I'll cancel my account too. Since I didn't upload to SS since last March, my monthly income there went down by 2/3 and I'm roughly at the same income as 2-3 years ago with half my port now. Sad to say, I'd better flip hamburgers or go on with commissioned.
Flemmish, can't you notarize copies of your document in the Philippines? They just need to verify that the copy matches the original. It doesn't mater in which language it is.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: eppic on May 27, 2009, 21:32
I got the email too.  It would stand to reason then that other US based agencies should have the same requirements since it's US tax law.  According to the email I got from Shutterstock, the June payout won't be affected by this but subsequent payouts will. 
Myself being Canadian and since IS is Canadian as well, it may be time to go exclusive with IS or else just drop SS.
Incidentally, which of the other big Microstock agencies are also based in the US?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: madelaide on May 27, 2009, 21:42
Notarized copies... Funny how different countries work.  I have a bank account in UK and, as a non-UK resident, I was able to apply not to pay taxes on investments. All I had to do was fill in a form, sign that I was telling the truth, etc, etc.  I guess the fact that my address was not in UK also counted, but then this is not much for a proof.

Geez, what other sites are based in USA?  I hope that doesn't happen in FT, although my account is in FT US (not of my choice).  I'm not in SS, so I haven't been affected... yet!

Also , if we, that provide free images to SS , (cause we are not payed for the upload) have to pay taxes to US where SS is based , with same logic SS would have to pay part of its income that came from our images to our governments the same way as we do ?

SS pays their taxes in USA, where they operate. The fact that many buyers and members are from other countries is irrelevant, they are not operating in these countries directly.  It is the buyer who accesses a US website, he is purchasing abroad.  
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: goldenangel on May 27, 2009, 21:44
DT has its address in the US although they also have another address in Romania.
123rf has its addres in the US too, together with other addresses in the UK, Australia, China and Hong Kong.

I wonder if having offices in other countries will exempt them from these IRS requirements. The answer to the whole problem would be: SS needs to move! :)
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: goldenangel on May 27, 2009, 21:51
Notarized copies... Funny how different countries work.  
It's actually pretty simple here. Notary offices are everywhere and they do it for $10.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Lizard on May 27, 2009, 22:28
Notarized copies... Funny how different countries work.  I have a bank account in UK and, as a non-UK resident, I was able to apply not to pay taxes on investments. All I had to do was fill in a form, sign that I was telling the truth, etc, etc.  I guess the fact that my address was not in UK also counted, but then this is not much for a proof.

Geez, what other sites are based in USA?  I hope that doesn't happen in FT, although my account is in FT US (not of my choice).  I'm not in SS, so I haven't been affected... yet!

Also , if we, that provide free images to SS , (cause we are not payed for the upload) have to pay taxes to US where SS is based , with same logic SS would have to pay part of its income that came from our images to our governments the same way as we do ?

SS pays their taxes in USA, where they operate. The fact that many buyers and members are from other countries is irrelevant, they are not operating in these countries directly.  It is the buyer who accesses a US website, he is purchasing abroad.  





SS is US based and we are not , so "our income" can be legally treated by US government only as "SS expenses" cause in this story only SS and US contributors are under their jurisdiction and rest of us are certainly not.

We can have legal obligations only to our governments ,and I see no reason why should we provide anything.If we don't pay our taxes we will legally answer to our government.

If a American seller wants to sell a shirt manufactured in China  , he will pay the Chinese manufacturer , import the shirt and sell it on US ground to whoever.

US can charge him the import tax , income tax , whatever , but they have nothing to do with that manufacturer in China , for his income he is responsible only to China laws, and does not have to provide nothing to US , especially not to pay US any taxes on his income.


Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: madelaide on May 27, 2009, 22:32
SS, not the photographer, is the seller - that's why we receive a commission.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Lizard on May 27, 2009, 22:48
SS, not the photographer, is the seller - that's why we receive a commission.

Exactly ,  I'm a manufacturer from my example above , I'm not selling anything in US , SS is US seller , so what do I have to do with US , I'm not manufacturing there,
I'm not selling there, and I haven't set my foot on US ground  ?

The can treat my income only as SS expenses
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: goldenangel on May 28, 2009, 00:11
Exactly ,  I'm a manufacturer from my example above , I'm not selling anything in US , SS is US seller , so what do I have to do with US , I'm not manufacturing there,
I'm not selling there, and I haven't set my foot on US ground  ?
I hate to be the devils advocate here, but as you say, you are not selling the images, SS is. You are receiving royalty income from a US source.

I have some Brazilian company stocks and when they pay dividends, I pay taxes to Brazil. I used to have stocks of Nokia and I similarly had to pay taxes to Finland. The concept is not new. I really think SS should seriously consider moving somewhere else if they want to remain competitive.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: sharpshot on May 28, 2009, 01:14
I had a closer look at this and the only real hassle I can see is getting my documentation notarized.  It would be OK if we had more time to do this but it looks like it is unlikely I will get my ITIN before the July payout.  SS should give everyone a few month to sort this out.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Bateleur on May 28, 2009, 01:43
One aspect that I am deeply uneasy about is the US Government collecting personal data on hundreds of thousands of people who have no connection with the US whatsoever ... like me.

I don't want to give the US Government my name, address, birth information, citizenship status, foreign tax number, signature and a copy of my identity document (all of which are required for the ITIN). What business is it of theirs?

I don't want to give them 30% of my income from Shutterstock either.

So I guess I'm out of Shutterstock. Too bad, but there are many more agencies in the field, across the globe. I never thought the day would come, but I may even go exclusive with one of them now.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: leaf on May 28, 2009, 02:03
I would suggest getting those papers in order because it is only a matter of time before the other sites do the same.  It isn't as big a job as it appears.

If you qualify for an EIN you can get it over the phone (and the official papers will be sent in the mail) speading things up a bit.  IRS number +1-215-516-6999 That is how I got my number a while back when another site needed it.

Then just fill out this
W-8BEN Form Certificate of Foreign Status http://www.irs.gov/pub/irs-pdf/fw8ben.pdf

 and your done.

I did not receive a letter from Shutterstock though.. and i am guessing I should have :(

I haven't seen anywhere telling me where to send the forms and if they just want the W-8BEN or if they want to see the EIN form as well?!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Peter on May 28, 2009, 02:05
I live in bosnia, that means:

1. I dont have to send any documents
2. They will take 30% of my earnings

is that correct?


thats bad man, 30% is a lot... thats just great, sales are going down anyway, and now they take 30% more.... pft...

Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: leaf on May 28, 2009, 02:08
yes that is correct Peter

You should then be able to not pay tax or at least less tax on the Shutterstock money you claim on your Bosnian taxes
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: leaf on May 28, 2009, 02:09
Can someone please copy and paste the email they got from Shutterstock about this.  There seems to be some information in there that is necessary to figure out what they need from me... and I didn't get the email!

Shutterstock opened the one thread for 'questions and answers' but they aren't answering any of the questions!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: sharpshot on May 28, 2009, 02:13
This is the email I received.

Quote
This letter is to advise you of potential changes in the amount of tax that may be withheld from your Shutterstock earnings.

In reviewing our files we discovered that we do not have a record of having received any US withholding tax certificates from you. Based upon the information in our files it appears that you may be a resident of United Kingdom, which has an income tax treaty with the United States that provides for a reduced rate of withholding tax on royalties.

If you are a resident of United Kingdom and qualify for benefits under the US/United Kingdom income tax treaty, you will need to complete a U.S. Internal Revenue Service (IRS) Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. We are in the process of installing an online version of Form W-8BEN on our website; however, in order to complete Form W-8BEN you must have a U.S. Individual Taxpayer Identification Number (ITIN). If you do not currently have an ITIN, you can obtain one by filing a Form W-7, Application for IRS Individual Taxpayer Identification Number, with the IRS. This process takes only 4-6 weeks and could reduce your withholding taxes significantly.

Please complete the most recent version of Form W-7 by checking Box a (Nonresident alien required to obtain ITIN to claim tax treaty benefits), providing the information requested in Lines 1 through 6, and signing the form where indicated. You must provide certified or notarized copies of documents, such as your passport, that substantiate the information contained on Form W-7.

After completing the W-7 form and providing the required documentation as described above, you can apply for an ITIN in any of three ways:

1. by mail through the IRS, with details available here:

[url]http://www.irs.gov/individuals/article/0,,id=96287,00.html[/url]

2. using the services of an IRS-authorized Acceptance Agent in your country

3. by visiting an IRS Taxpayer Assistance Center in Frankfurt, London, or Paris, where they will provide in-person help with ITIN applications on a walk-in or appointment basis.

[url]http://www.irs.gov/localcontacts/article/0,,id=101292,00.html[/url]

Please note that without an ITIN and a completed IRS Form W-8BEN on file at Shutterstock, we will be required to deduct a 30% US withholding tax from royalties payable to you.

We will send you a separate email when our online Form W-8BEN is ready for use. Your early June royalty payment will not be subject to withholdings but subsequent royalty payments may be.

If you have questions on tax withholding from your Shutterstock earnings, please visit our submitter forum.

 

Thank you for your cooperation and attention to this matter.

 

Best Regards,

Shutterstock Images LLC
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: leaf on May 28, 2009, 02:21
Thanks for the info sharpshot.  So they didn't really say where to send it, I suppose just back to same email address? Can you post that email address here or send it as a PM.

And just to repeat myself, if you need the ITIN try calling the IRS and save yourself some time and paperwork
IRS number +1-215-516-6999
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: cidepix on May 28, 2009, 02:43
Thanks for the info sharpshot.  So they didn't really say where to send it, I suppose just back to same email address? Can you post that email address here or send it as a PM.

And just to repeat myself, if you need the ITIN try calling the IRS and save yourself some time and paperwork
IRS number +1-215-516-6999

Leaf, it's all nice since we are in Europe, me in UK you in Norway?! We sure can get this sorted. But it is a huge problem for people who are not in countries that has a tax treaty with US. I don't think the world becomes a great place if we only think about saving our own butts. SS or any company needs a different solution.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: leaf on May 28, 2009, 02:48
Thanks for the info sharpshot.  So they didn't really say where to send it, I suppose just back to same email address? Can you post that email address here or send it as a PM.

And just to repeat myself, if you need the ITIN try calling the IRS and save yourself some time and paperwork
IRS number +1-215-516-6999

Leaf, it's all nice since we are in Europe, me in UK you in Norway?! We sure can get this sorted. But it is a huge problem for people who are not in countries that has a tax treaty with US. I don't think the world becomes a great place if we only think about saving our own butts. SS or any company needs a different solution.

yes i agree it is a terrible solution for those who have to have any tax withheld or have to jump through ridiculous hoops to get the papers in order.  What else could shutterstock do though besides moving their office to another country?  perhaps they should head over to Ireland like Snapvillage did.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: cidepix on May 28, 2009, 02:54
Thanks for the info sharpshot.  So they didn't really say where to send it, I suppose just back to same email address? Can you post that email address here or send it as a PM.

And just to repeat myself, if you need the ITIN try calling the IRS and save yourself some time and paperwork
IRS number +1-215-516-6999

Leaf, it's all nice since we are in Europe, me in UK you in Norway?! We sure can get this sorted. But it is a huge problem for people who are not in countries that has a tax treaty with US. I don't think the world becomes a great place if we only think about saving our own butts. SS or any company needs a different solution.

yes i agree it is a terrible solution for those who have to have any tax withheld or have to jump through ridiculous hoops to get the papers in order.  What else could shutterstock do though besides moving their office to another country?  perhaps they should head over to Ireland like Snapvillage did.


That's the solution. But even for us to provide the original passport or pay ridiculous amounts for the identification as they state on SS forums is unacceptable. If moving to Ireland will sort it then they should, without doubt.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Caz on May 28, 2009, 02:56
Double indemnity taxation - I live in the UK, so if I do nothing, it will be 0% withheld as that is the current tax agreement. It is up to me to declare income in the UK earned overseas. You don't pay tax on income twice. (US/UK).

Oldhand


Actually that's not how it works. If you are a UK resident and do nothing, 30% will be withheld. It's the same with Getty. It's deducted at source. Do nothing and watch your income drop by 30%  
The paperwork isn't all that complicated, but getting your documents notorised can be (depending on where you live). If you live in a city it shouldn't be too much of a hassle. If you don't, like me, you might have to travel quite some distance to your nearest notary public. And they charge, per document.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: null on May 28, 2009, 03:05
It's actually pretty simple here. Notary offices are everywhere and they do it for $10.

I just found out I will have to fly to an area North of Manila (Angeles) 950km North from here, and queue there for an appointment. Flight 150$, taxis, buses, hotels another 250$. Since official offices in the Phils are notorious for their many days off and long waiting queues (you can avoid those by 20$+ if you're lucky) under the table, and the Philippine mail is not an option (corrupt, fraud) that joke will cost me a week and let's say 500$. Just because that IRS is a bunch of red-taped dinosaurs that want snail mail and can't handle their business online, apparently, and that in a global business environment, with contributors from all over the world.

I can't also deduct my costs from that 30% tax, and my costs are a large part of my microstock income. The IRS treats it as pure profit. No taxation without representation, remember?
Shutterstock can try to strike a deal with the IRS where they obtain a global exemption of the snail mail red tape, or they can start an offshore operation e.g. in Ireland like Snapvillage did.

Whatever, but I'm not going to spit out 500$ and lose a week for SS's IRS. I'm not going to put extra time in special edits (less noise, popped up colors) for SS if a sale brings only 33cents - 11cents = 22cents. If SS wants to be an all-American operation, so be it. I don't pay taxes to a country that supported Bush and his neocon morons for 8 years and that brought us the credit crunch.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: sharpshot on May 28, 2009, 03:16
Thanks for the info sharpshot.  So they didn't really say where to send it, I suppose just back to same email address? Can you post that email address here or send it as a PM.

And just to repeat myself, if you need the ITIN try calling the IRS and save yourself some time and paperwork
IRS number +1-215-516-6999

There is no email address to send it to, they are going to have an online form "We will send you a separate email when our online Form W-8BEN is ready for use."
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: borg on May 28, 2009, 03:26
1. Our buyers probably are not all Americans, only agency in the territory of USA, but this is Internet or global business..

2.SS is only WORLD WIDE DISTRIBUTION CHANNEL for our work, and we pay commission to SS for that...

3.I dont have work permission in US. So why I need to pay tax to US government?

4.I take my shots outside the USA.


Conclusion question, who need to pay tax in USA?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: goldenangel on May 28, 2009, 03:42
Flemmish, I'm sorry to hear that! This whole thing is obviously bringing so many obstacles to so many people. The sooner the SS realizes they need to move, the better. I can't see how they are going to stay competitive with other agencies.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: pauloresende on May 28, 2009, 04:38
One other agencie that is base in US only ask me for the W-8BEN form.
I don´t need one IRS number or to pay tax in US.
If one agencie manage to solve the problem with only the W-8BEN, way did SS ask for ITIN and a lot of information that is very hard to non-US citizens to obtain?

Since January that my sales at SS as drop for more that 60%. I need almost 2 months to reach to the minimum payout, the dollar is falling. This is to much for 40€ month. I prefer close my account.
I pay taxes in my country! Is where i live and where i need roads, schools, medical care!
In my opinion SS must pay tax because they are US firm. I´n not employe of SS!!!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: mjp on May 28, 2009, 04:45
I would suggest getting those papers in order because it is only a matter of time before the other sites do the same.  It isn't as big a job as it appears.

If you qualify for an EIN you can get it over the phone (and the official papers will be sent in the mail) speading things up a bit.  IRS number +1-215-516-6999 That is how I got my number a while back when another site needed it.

Then just fill out this
W-8BEN Form Certificate of Foreign Status [url]http://www.irs.gov/pub/irs-pdf/fw8ben.pdf[/url]

 and your done.

I did not receive a letter from Shutterstock though.. and i am guessing I should have :(

I haven't seen anywhere telling me where to send the forms and if they just want the W-8BEN or if they want to see the EIN form as well?!


Hi Leaf,

We submit as a company so is the EIN code what we need to fullfil the W-8BEN document? Is there any costs to get that ITIN or EIN code (other than notary documents or similar)?

br, MjP
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: miskolin on May 28, 2009, 05:03
There's already petition going on against SS, where people say they'll delete their portfolios if this tax rule won't be somehow changed:
http://www.gopetition.com/online/28117.html (http://www.gopetition.com/online/28117.html)

and the sign-ins:
http://www.gopetition.com/online/28117/signatures.html (http://www.gopetition.com/online/28117/signatures.html)

those numbers are growing fast!

EDIT: looks like Yuri Arcurs also signed this petition with threat of removing all his images (look at #97)---it's fake
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: russw on May 28, 2009, 05:06
Firstly when i read the SS email, it read as a cheap scam from some third world country. After a while though it sank in that it was all above board. Now after a few hours all it seems is a method of reducing non US contributors to SS, and ignoring the concept of free trade and promoting protectionism via the back door. This IRS "con" doesn't seem to exist on any of the other dozen stock sites i deal with so why with SS. Simple - at the end of the month i'm opting out of any picture sales until SS sees sense if not then it's bye bye. With thier pathetic 25cents fees just how daft do they take all non US residents anyway!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: kgtoh on May 28, 2009, 05:10
For those of us affected, this effectively cuts commissions by 30%
so we are earning

17 cents per download
through
26 cents at the highest level

I have signed the petition and will be removing my portfolio the moment they force me to pay US tax.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: kgtoh on May 28, 2009, 05:15
Shutterstock can easily remedy the situation by incorporating in another country and processing payments through there.  Dreamstime and Fotolia are incorporated in Europe and contributors there will never face this problem.

I will leave Shutterstock not so much because I have to pay taxes, but because it is  a situation that Shutterstock could avoid if it chooses to do so. I hope they take the actions to solve this problem.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: MikLav on May 28, 2009, 05:24
EDIT: looks like Yuri Arcurs also signed this petition with threat of removing all his images (look at #97)---it's fake
that one looks fake

EDIT: you updated is sooner than I commented :)
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: stock_fan on May 28, 2009, 05:30
What a mess!

I filled out plenty of W-8BEN, but never needed a ITIN?!

I am a German Citizen and a Permanent Resident of Australia. Can I choose? Germany gets 0%, Oz 5% ....


Hi Leaf,
what documents did you provide to get the ITIN? Who can do the certification? Does it need to be an US embassy / US institution ... can't imagine the IRS accepts a certification from Joe the police man or Mike the town hall clerk ...
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: GeoPappas on May 28, 2009, 05:46
On the positive side, this might eliminate many of the fake subscribers that contribute stolen materials.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Talanis on May 28, 2009, 05:57
Like many, my sales drop in SS in the last months (to about 50% of what it was) ao add all the hassle to that and it's not worth it. I am considering cancelling my account there. I am also considering more and more going exclusive eith all the crap we got from some sites lately.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Sean Locke Photography on May 28, 2009, 06:05
Wow, what a mess.  I don't understand why the IRS wants 30% just because it flows through an American site.  Sorry for you foreigners (to the US).
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: sharpshot on May 28, 2009, 06:06
The photoshelter collection site tried bringing this in and it wasn't very popular.  I didn't bother doing it then, as I didn't have any sales.  The site folded a few months later, SS are nothing like them but this could hit them hard.  There is no way I would stay there if I couldn't get the 30% tax back.  Here's the thread about the Photoshelter collection.
http://www.microstockgroup.com/general-macrostock/photoshelter-us-tax-requirements-for-non-americans/
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: leaf on May 28, 2009, 06:07
I would suggest getting those papers in order because it is only a matter of time before the other sites do the same.  It isn't as big a job as it appears.

If you qualify for an EIN you can get it over the phone (and the official papers will be sent in the mail) speading things up a bit.  IRS number +1-215-516-6999 That is how I got my number a while back when another site needed it.

Then just fill out this
W-8BEN Form Certificate of Foreign Status [url]http://www.irs.gov/pub/irs-pdf/fw8ben.pdf[/url]

 and your done.

I did not receive a letter from Shutterstock though.. and i am guessing I should have :(

I haven't seen anywhere telling me where to send the forms and if they just want the W-8BEN or if they want to see the EIN form as well?!


Hi Leaf,

We submit as a company so is the EIN code what we need to fullfil the W-8BEN document? Is there any costs to get that ITIN or EIN code (other than notary documents or similar)?

br, MjP


i can't say for sure what you need as I did it for a personal 'sole proprietor' business but no, I didn't have to pay anything to get the number.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: leaf on May 28, 2009, 06:08
Canada must not have rules like that otherwise iStock would have to do something similar.  Shutterstock could always head up to the Great White North :)
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: sharpshot on May 28, 2009, 06:09
Wow, what a mess.  I don't understand why the IRS wants 30% just because it flows through an American site.  Sorry for you foreigners (to the US).

From what I understand, they don't.  That is the penalty level that SS might have to pay.  I noticed that SS said in the last line of their email that they may take this after the June payout, not that they will take it.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Sean Locke Photography on May 28, 2009, 06:13
Says it right in the first post:

"US tax law imposes a 30% withholding tax on US source passive income, such as royalties, that are paid to persons who are not citizens or residents of the United States. US tax law requires the person paying the royalties to withhold the tax and pay it to the US Internal Revenue Service."
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: melking on May 28, 2009, 06:27
Canada must not have rules like that otherwise iStock would have to do something similar.  Shutterstock could always head up to the Great White North :)

That sounds like a great idea!!!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: kgtoh on May 28, 2009, 06:48
"I would suggest getting those papers in order because it is only a matter of time before the other sites do the same.  It isn't as big a job as it appears."

Fotolia and Dreamstime are in Europe; Istock is in Canada.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on May 28, 2009, 06:51
Says it right in the first post:

"US tax law imposes a 30% withholding tax on US source passive income, such as royalties, that are paid to persons who are not citizens or residents of the United States. US tax law requires the person paying the royalties to withhold the tax and pay it to the US Internal Revenue Service."

This is one of the reasons why online and basically virtual companies which are used internationally are often much better doing business from well regulated and properly policed, but less bureaucratic, streamlined jurisdictions which are also more tax competitive - ie their govts want businesses to exist on their soil not so that they can levy taxes but because the businesses provide employment locally.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: cidepix on May 28, 2009, 08:03
Keep it coming!

http://www.gopetition.com/petitions/say-no-to-us-taxation.html
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: borg on May 28, 2009, 08:07
Ha ha ha!

Topic is locked on SS...  :P

They still want my money to send IRS without my USA green card ...
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: designalldone on May 28, 2009, 08:13
Quite a serious letter from SS CEO:

http://submit.shutterstock.com/forum/viewtopic.php?t=62351
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: peresanz on May 28, 2009, 08:15
Quite a serious letter from SS CEO:

[url]http://submit.shutterstock.com/forum/viewtopic.php?t=62351[/url]



Well, I wouldn't say 'serious'... Better say 'rude'
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Sean Locke Photography on May 28, 2009, 08:20
Very rude.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: designalldone on May 28, 2009, 08:21
By 'serious' I meant it doesn't look like he's messing around and is prepared to delete contributor accounts if necessary.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Inga on May 28, 2009, 08:21
I get the feeling they don't want foreign contributors anymore! It really sounds like that! Especially the really rude reaction by Shutterstock!

Seams I really need to delete my images in the end... :'(
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Sean Locke Photography on May 28, 2009, 08:22
By 'serious' I meant it doesn't look like he's messing around and is prepared to delete contributor accounts if necessary.

Shows how much SS values its contributors, I guess...
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: dunsmore on May 28, 2009, 08:24
By 'serious' I meant it doesn't look like he's messing around and is prepared to delete contributor accounts if necessary.

Shows how much SS values its contributors, I guess...

Looks like iStock are going to be getting more exclusives!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: sharpshot on May 28, 2009, 08:31
By 'serious' I meant it doesn't look like he's messing around and is prepared to delete contributor accounts if necessary.

Shows how much SS values its contributors, I guess...
Sorry but you are biased.  For most of us this will just mean a few forms, a complete pain but not anything major.  I do feel for those who can't get the 30% back, SS should move countries but it is their business.  Nobody is going to make me move unless I want to and I respect them if they don't want to.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: shutterdrop on May 28, 2009, 08:35
The IRS regulation has been on the books for a very long time. Treaties between countries to prevent double-taxation have been around for a very long time. Other nations around the world have similiar tax regulation.

I remember all the heat on the forums how we needed change and how O'Banana was going to change the Evil Bush countries. How do like the change Now?

O'Banana and his tax cheaters are enforcing the law so you can't cheat the US big tax socialist government out of taxes. Yes, and the IRS want your private and personally information just in case they need to water-board you for more tax information.
The short is, "Be careful what you wish for." How do you like the O'Banana Now?



Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Dreamframer on May 28, 2009, 08:37
I will delete my account as well. I simply don't want to look how someone takes my money just because he thinks it's OK. Those are my images, and I will decide who's gonna sell them. If SS is serious company, they will find a solution. If they are not, I don't want to give them my images. SS is my best seller, but I am ready to do it.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: sharpshot on May 28, 2009, 08:40
The IRS regulation has been on the books for a very long time. Treaties between countries to prevent double-taxation have been around for a very long time. Other nations around the world have similiar tax regulation.

I remember all the heat on the forums how we needed change and how O'Banana was going to change the Evil Bush countries. How do like the change Now?

O'Banana and his tax cheaters are enforcing the law so you can't cheat the US big tax socialist government out of taxes. Yes, and the IRS want your private and personally information just in case they need to water-board you for more tax information.
The short is, "Be careful what you wish for." How do you like the O'Banana Now?
This has nothing to do with Obama, the laws were in place before he became president and as several people have stated, other sites have asked us to do this under previous presidents.

I have no problem if you want to blame it on Gordon Brown though :)
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: katinelis on May 28, 2009, 08:47
SS says:
"6) If you think other microstock companies are except from paying tax, think again. It's a matter of time before they start following the law also."

that about DT or fotolia?  ???
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: una on May 28, 2009, 08:49
I get the feeling they don't want foreign contributors anymore! It really sounds like that! Especially the really rude reaction by Shutterstock!

Seams I really need to delete my images in the end... :'(

I have the same feeling :(
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Talanis on May 28, 2009, 08:51
Very rude.

Quite rude indeed. It's funny though... the Title say Calm down and he doesn't sound like a calm guy at all while writing this PoS post. I can't believe a chairman of a big company like SS gives an obnoxiously rude answer like that to the very people who allows him to make money and tun his business. He needs a serious kick in the butt or  a good slap on the face IMO. That's what my mom would have given me if I had answer someone like this.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: shutterdrop on May 28, 2009, 08:54
It has everything with the new administration enforcement of current IRS regulation. SS is large profit corporation that must comply with the law. It is liable for taxes with penalty and including any fines. SS is the pocket with the large tax liability and there will be others. It happen everytime a new sheriff ride into town. O'Banana is the New Sheriff in town.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: domencolja on May 28, 2009, 09:06
Hmm... there is some inconsistencies regarding the interpretations of these US tax laws (citizens/residents or not, treaty countries or not, legal proof feedback of IRS taxes in the future (to get refunds in country of origin), the difference between ITIN forms for companies and individuals (as of now the mass is focused on the later with no word on the course to take if a submitter is legally a or working via a business entity) and lots of smaller details that will surely be cleared out in due time.

I can to some extent understand SS's concerns that the IRS might in the future take legal action against them for conducting illegal tax activities (open to debate, of course), but I've not read one single time about any concerns regarding retroactive taxation in this particular case. Why now if the law hasn't changed? Bear in mind, because from a legal perspective it's blattantly clear, that if the IRS decides to scrutinize Shutterstock's activities from a tax evasion perspective, the end is already at their doorsteps. If you're a company following a certain tax jurisdiction, you can't just start paying a particular tax in the middle of nowhere. The IRS will check past tax payment flows and I'm quite sure this means paying 30% of foreign submitters income (if their interpretation of such laws is correct) for ALL THE PAST YEARS since the specific law is in effect (it is not a new law, keep that in mind). Can you imagine the consequences of such a debt?

That's what most scares me, not the ITIN/W8 bureocraticism.

I still hope for the best both for SS and all of us depending on their business.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on May 28, 2009, 09:17
@ pt1:

There is an important technical and legal difference between "tax evasion" and "tax avoidance".

Tax avoidance is the perfectly sensible and legal business of operating a business from within the most efficient competitive tax structure.

Moving a business to a less bureaucratic competitive jurisdiction would not be an example of "tax evasion" and it would be incorrect to describe it so.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: grp_photo on May 28, 2009, 09:23
SS says:
"6) If you think other microstock companies are except from paying tax, think again. It's a matter of time before they start following the law also."

that about DT or fotolia?  ???
No Fotolia and DT are not US-Companies and not based in US they now have also US Offices thats all. The only agencies i see for this kind of action are Bigstock and 123RF maybe VMP too.
I think Jon Oringer underestimate the effect of this, SS will loose contributors AND buyers in the long term because of this.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on May 28, 2009, 09:29
O'Banana is the New Sheriff in town.

I don't like the way the US does this, and I don't think that it is good for the US long term but it way pre dates the new administration.

But far more importantly than any tax issue: there is something deeply offensive and unpleasant about you calling him "Banana".
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Norebbo on May 28, 2009, 09:35
I'm not really understanding the backlash against SS. This is a US regulation, and SS in no way benefits from this. This is not putting more money in their pockets, and I'm sure it's a pain in the ass for them too!

They just got the short end of the stick here. The other major micro's (DT, IS, FT, etc) have the advantage of being headquartered outside of the US.

Yeah, it sucks for non-US contributors, but...it's the cost of doing business.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on May 28, 2009, 09:40
Yeah, it sucks for non-US contributors, but...it's the cost of doing business.

... the cost of doing business with US based companies. This offers a competitive advantage to non US companies operating in countries which have more sensibly structured tax infrastructure.

It is surprising that in a time of economic difficulties the US would not want to look again at this since it is basically a disincentive for people to operate out of the US. = less jobs ultimately.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: petrol on May 28, 2009, 09:46
Yeah, it sucks for non-US contributors, but...it's the cost of doing business.

... the cost of doing business with US based companies. This offers a competitive advantage to non US companies operating in countries which have more sensibly structured tax infrastructure.

It is surprising that in a time of economic difficulties the US would not want to look again at this since it is basically a disincentive for people to operate out of the US. = less jobs ultimately.

Ultimately this could probably lead to some ss employees being fired as there will be a lot less images, accounts and customers to look after. This would be negative for USA gov in the end. If all american companies need to go through this, no selfemployed smalltime artists or businessmen will ever want to do business with american companies.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: kgtoh on May 28, 2009, 09:50
Very rude.

Quite rude indeed. It's funny though... the Title say Calm down and he doesn't sound like a calm guy at all while writing this PoS post. I can't believe a chairman of a big company like SS gives an obnoxiously rude answer like that to the very people who allows him to make money and tun his business. He needs a serious kick in the butt or  a good slap on the face IMO. That's what my mom would have given me if I had answer someone like this.

I'm not a big fan of IS, but I can't quite imagine IS top management shouting down to contributors like that.
Is he trying to intimidate people into keeping quiet?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Inga on May 28, 2009, 09:55
perhaps he got rude out of despair. It would appear he does not see any other choice and now watches how the contributors threaten to leave or leave already. This would ruin Shutterstock and he is well aware of that.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: kgtoh on May 28, 2009, 09:58
He has options.
The question is whether he wants to take the effort to implement them (i'm not saying they're easy options) or just ram everything down contributors throats and hope they don't choke too much.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: petrol on May 28, 2009, 10:02
perhaps he got rude out of despair. It would appear he does not see any other choice and now watches how the contributors threaten to leave or leave already. This would ruin Shutterstock and he is well aware of that.

Yes, to me it seems he has already expected and accepted this. Else I cannot understand why he would speak to people that bring money to his table in this manner.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Norebbo on May 28, 2009, 10:15
He has options.

Like what? Moving the company to Canada? That would be unbelievably difficult and expensive.

They have no choice in the matter - this is something they (and other US microstock houses) have to do. I think I'd be pissed if I were Jon too. I'd be pissed at the government, as well as the contributors trying to start petitions  ::) to get this overturned.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: russw on May 28, 2009, 10:16
If SS think that I'm going to spend any money whatsoever getting passports ID etc notorised or rubber stamped they have another thing coming. The simple fact for SS is that June 1st will see vast swathes of thier libray removed (including mine) and thier finances reduced accordingly. Call it what you want but it's all down to US protectionism for thier contributors and the big finger to any foreigners. After all 25c is an insult really - i only uploaded here whilst i was uploading to the others!!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: phildate on May 28, 2009, 10:20
I am a UK citizen living in Singapore. There is no tax treaty between Singapore and US so am I right in thinking that I apply for this from my UK address and using UK passport?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: massman on May 28, 2009, 10:23
I am a UK citizen living in Singapore. There is no tax treaty between Singapore and US so am I right in thinking that I apply for this from my UK address and using UK passport?

I think it depends on which government you currently pay your taxes to. Paul Cowen posted something similar on the SS forum debate regarding this matter.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: kgtoh on May 28, 2009, 10:23
Like what? Moving the company to Canada? That would be unbelievably difficult and expensive.

He doesn't have to move his operations in entirety.
The company I work for maintains offices in multiple countries, including one in Dubai, specifically for tax reasons.
It takes a bit of effort, and he needs to hire to appropriate experts, but it can be done, and might be the best longterm option.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: stockastic on May 28, 2009, 10:29
This thing doesn't affect me, but I was stunned by the rude and obnoxious rant posted by SS's CEO.  It really took my image of Shutterstock down to the floor.

It reminded me that there is no commitment by these companies whatsover.  You might invest a lot of time over a period of months or years in uploading, keywording and categorizing images on a microstock - then one day a guy decides he doesn't like your forum avatar and deletes your entire account.  

Holy [email protected]

There has to be a better way to sell stock photos than through web sites run by bad-tempered kids.  

Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: borg on May 28, 2009, 10:36
Calm down + text after???

Very unprofessional, raw, filthy, offensive behavior!!!

This is advantage for other agencies with respect for foreign contributors...
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: PeterChigmaroff on May 28, 2009, 10:46
He has options.

Like what? Moving the company to Canada? That would be unbelievably difficult and expensive.

As a Canadian it's actually more difficult dealing with iS than US based companies. Book keeping wise that is.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Pixart on May 28, 2009, 10:55
If they are withholding taxes SS will then have to send us an official annual statement of earnings won't they?  Up here in Canada it is a Federal document called a T-4 which has earnings, payroll taxes, etc.  Doesn't that kind of make us employees instead of independent contractors?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Inga on May 28, 2009, 10:56
It would seam someone is banned from the SS forums already.... I really don't like how they handle this!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Magnum on May 28, 2009, 11:01
Quote from Leaf:

If you qualify for an EIN you can get it over the phone (and the official papers will be sent in the mail) speading things up a bit.  IRS number +1-215-516-6999 That is how I got my number a while back when another site needed it.



Can u explain this. It seems too easy. To get ITIN u need to do a W7 and send in together with Notarized Id. Is this something else?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Ploink on May 28, 2009, 11:08
Can u explain this. It seems too easy. To get ITIN u need to do a W7 and send in together with Notarized Id. Is this something else?

I'm not Leaf, but as far as I understand it, you are eligible for an EIN - as opposed to an ITIN - if you sell your photos as a registered business, even if it's a one man company. If you sell them as a private person you need an ITIN - at least that is my understanding...
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Magnum on May 28, 2009, 11:19
Can u explain this. It seems too easy. To get ITIN u need to do a W7 and send in together with Notarized Id. Is this something else?

I'm not Leaf, but as far as I understand it, you are eligible for an EIN - as opposed to an ITIN - if you sell your photos as a registered business, even if it's a one man company. If you sell them as a private person you need an ITIN - at least that is my understanding...

Thanks.

So if you have a business you don´t have to go through the paperwork and notorized id trouble.  Just call a number?     
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on May 28, 2009, 11:26
If you are a company then you have to apply to the IRS for an EIN (Employeee Identification Number).

You will need form SS-4. NOT form W-7. Shutterstock need to update their info I think.

Kafkaesque US bureacracy ! Lets hope the agencies all move to somewhere where it is easier to do business.

Can u explain this. It seems too easy. To get ITIN u need to do a W7 and send in together with Notarized Id. Is this something else?

I'm not Leaf, but as far as I understand it, you are eligible for an EIN - as opposed to an ITIN - if you sell your photos as a registered business, even if it's a one man company. If you sell them as a private person you need an ITIN - at least that is my understanding...

Thanks.

So if you have a business you don´t have to go through the paperwork and notorized id trouble.  Just call a number?     
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: melking on May 28, 2009, 11:31
Are people really deleting there photos over this?  All you have to do is fill out the form and sent it...done!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: PeterChigmaroff on May 28, 2009, 11:31
Quote from Leaf:

If you qualify for an EIN you can get it over the phone (and the official papers will be sent in the mail) speading things up a bit.  IRS number +1-215-516-6999 That is how I got my number a while back when another site needed it.



Can u explain this. It seems too easy. To get ITIN u need to do a W7 and send in together with Notarized Id. Is this something else?

When I did this I got both numbers and recall one of them needing only a simple telephone call to get. I thought the same thing. Why so easy? Who cares though.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Nemo1024 on May 28, 2009, 11:32
Well, I earn well less than $200 year at Shutterstock, which means that I do not have to pay taxes from this income to Norway (a 1000NOK free limit). Paying to the US embassy to get that number and notarisation will probably cancel out a whole year's payment for me. I think I'll just wait for the next pay-out, loose 30% and close the account...
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Magnum on May 28, 2009, 11:35
Well, I earn well less than $200 year at Shutterstock, which means that I do not have to pay taxes from this income to Norway (a 1000NOK free limit). Paying to the US embassy to get that number and notarisation will probably cancel out a whole year's payment for me. I think I'll just wait for the next pay-out, loose 30% and close the account...

200$ together with your total income is probably over 1000NOK. Am I right.       Else you can earn. 200$ from 200 different companies without paying tax.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Magnum on May 28, 2009, 11:39
To clearify this once and for all.    I call this number:  IRS number +1-215-516-6999 and get a EIN number.  Instead of Pain-in-the-a  ITIN number for Private contributors.   And the people answering wont think Im an idiot for asking?   

How can they give away numbers like that when it takes notarized id:s for privates?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Nemo1024 on May 28, 2009, 11:40
That is a 1000NOK limit from any single employer... That means that I can have a full-time day job, from which I pay my 45% tax and then I can take an occasional assignment or hobby income, which are tax-free.


200$ together with your total income is probably over 1000NOK. Am I right.       Else you can earn. 200$ from 200 different companies without paying tax.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Inga on May 28, 2009, 11:53
I don't remember that I said anything rude, but I'm baned too now   :(
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Magnum on May 28, 2009, 12:01
That is a 1000NOK limit from any single employer... That means that I can have a full-time day job, from which I pay my 45% tax and then I can take an occasional assignment or hobby income, which are tax-free.


200$ together with your total income is probably over 1000NOK. Am I right.       Else you can earn. 200$ from 200 different companies without paying tax.

Even if you earns from 10 agencies?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: shutterdrop on May 28, 2009, 12:03
O'Banana is the New Sheriff in town.

I don't like the way the US does this, and I don't think that it is good for the US long term but it way pre dates the new administration.

But far more importantly than any tax issue: there is something deeply offensive and unpleasant about you calling him "Banana".

"O'Banana " is very mild compared to the offensive and unpleasant names used for past presidents!

Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: michaeldb on May 28, 2009, 12:12
O'Banana is the New Sheriff in town.

I don't like the way the US does this, and I don't think that it is good for the US long term but it way pre dates the new administration.

But far more importantly than any tax issue: there is something deeply offensive and unpleasant about you calling him "Banana".

"O'Banana " is very mild compared to the offensive and unpleasant names used for past presidents!
I for one welcome our new o'Banana overlords. I guess all the foreign and domestic supporters of Obama thought he wasn't really serious about being an anti-business big-gov big-tax socialist?

Obama supporters will claim that he is not responsible for things like this, but it happens on his watch. And he has announced that he will try to increase revenues by closing international tax 'loopholes'. Would Obama's defenders say that Bush was not responsible for what happened during his administration?

I am a US citizen. Presumably, the countries in which IS, CS, FT, DT are located (i.e. Canada,  Italy?, Romania?) are headquartered are signatories to this tax treaty, then why do they not withhold 30% of my income, as a foreigner being paid by them?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on May 28, 2009, 12:18
Obama supporters will claim that he is not responsible for things like this, but it happens on his watch.

I'm calling BS on that. US based agencies eg Getty have long required this.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: mantonino on May 28, 2009, 12:32
Just so you guys know, I posted about this on NiltoMil and Shutterstock almost immediately contacted me offering to answer any questions I can't find answers to (previous life I was in law)... so if you have questions, try to accumulate them here or post them to N2M and I'll submit them when I reply to them.  Hopefully having a direct line to some answers will help everyone.

Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: runamock on May 28, 2009, 12:37
Just so you guys know, I posted about this on NiltoMil and Shutterstock almost immediately contacted me offering to answer any questions I can't find answers to (previous life I was in law)... so if you have questions, try to accumulate them here or post them to N2M and I'll submit them when I reply to them.  Hopefully having a direct line to some answers will help everyone.



Thanks appreciate it!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: michaeldb on May 28, 2009, 12:46
Obama supporters will claim that he is not responsible for things like this, but it happens on his watch.
I'm calling BS on that. US based agencies eg Getty have long required this.
"Obama supporters will claim that he is not responsible for things like this." Thank you 'Alias' for fulfilling my prophecy so quickly.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: ThomasAmby on May 28, 2009, 12:53
I was just banned from the Shutterstock forum. Why I don't know - I kept the tone clean.

How WONDERFUL HUH?

Now I will never figure out how to get all this paperwork done.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Magnum on May 28, 2009, 12:56
I was just banned from the Shutterstock forum. Why I don't know - I kept the tone clean.

How WONDERFUL HUH?

Now I will never figure out how to get all this paperwork done.

Atleast you have your portfolio there.  Or? have u checked.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: stockastic on May 28, 2009, 12:58
Obviously SS is a privately held company.  Because if it were public, and had a board of directors, a CEO who threw a public tantrum - which accomplished nothing except to alienate contributors and damage the company's image - might very well be out on his ear.  

The tax thing will be worked out in time - but this guy apparently will be around for a while. 



Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: epantha on May 28, 2009, 13:04
The CEO rant post has been removed.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Inga on May 28, 2009, 13:05
I was just banned from the Shutterstock forum. Why I don't know - I kept the tone clean.

How WONDERFUL HUH?

Now I will never figure out how to get all this paperwork done.

me too! But my port is still there.

I don't understand it. Yes, I complained, but hey, who would not?? I did not insult anyone!!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on May 28, 2009, 13:07
Obama supporters will claim that he is not responsible for things like this, but it happens on his watch.
I'm calling BS on that. US based agencies eg Getty have long required this.
"Obama supporters will claim that he is not responsible for things like this." Thank you 'Alias' for fulfilling my prophecy so quickly.

OOOh and look I've even provided evidence demonstrating that he is not responsible.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Magnum on May 28, 2009, 13:08
The CEO rant post has been removed.

That´s hilarious :)
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: tdoes on May 28, 2009, 13:20
Taxes are a pain in the AZZZ!

I'm a US citizen and don't understand why non-US citizen submitters need to be taxed by my country.  It should be set up this way.  Shutterstock pays taxes on money made off of submitters and submitters pay taxes to their country on money paid to them from Shutterstock.

Maybe this is just too fair!! ???
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: ThomasAmby on May 28, 2009, 13:27
Can anyone please tell me what a TAX RETURN is ? It states that I should provide the IRS with the W-7 along with my "tax return". What is this? Do I have to include it?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: stockastic on May 28, 2009, 13:30
The CEO rant post has been removed.

Hope they have him sitting down and breathing into a paper bag.

Forget taxes. The take-away here is - if you do something that annoys this guy he'll just delete all your work.  





Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Talanis on May 28, 2009, 13:32
The CEO rant post has been removed.


It's still there, just not pinned on the first page.

http://submit.shutterstock.com/forum/viewtopic.php?t=62351 (http://submit.shutterstock.com/forum/viewtopic.php?t=62351)
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Talanis on May 28, 2009, 13:34
EDIT: original version posted lower on this page.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Sean Locke Photography on May 28, 2009, 13:35
By 'serious' I meant it doesn't look like he's messing around and is prepared to delete contributor accounts if necessary.

Shows how much SS values its contributors, I guess...
Sorry but you are biased. 

I'm not biased.  If he's willing to run about deleting people's accounts because they are trying to express their frustration, that doesn't seem to value those contributors (contributors, by the way, without whom he is just a guy with a couple of servers).
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: stockastic on May 28, 2009, 13:38
I always have a problem with a company that puts up a "forum" and thinks it's going to be a place where people gather to sing the company song.   If you can't handle negative feedback, take down the forum.



Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: kgtoh on May 28, 2009, 13:40
The CEO rant, recorded for posterity, in case it's removed from SS forums:


Okay.

1) This is a US government regulation. What would you like us to do about it? Go to jail? Go out of business? We are sorry - but we can't just move the company out of the US or creating another company somewhere else to pay you. That is called tax evasion. These are laws. We can't change the laws. We have 60 employees in NYC - they aren't going anywhere.

2) If you follow the rules you won't be double taxed. Your country has rules that we follow every day also. You may need to do a bit of work here, but we will help you out with them. You will have a chance to get your ITIN before we start following regulations and witholding.

3) If I continue to read threads on the forum that you will be taking your images elsewhere, I will delete them myself and close your account.

4) Online petition claiming we are taxing you? Why would we be taxing you? Again, this is the US government. We are just following the law.

5) Want to change your avatar to something obnoxious? Again, I will personally delete your profile, images, etc. You are just creating more work for us.

6) If you think other microstock companies are except from paying tax, think again. It's a matter of time before they start following the law also.

7) Why don't US citizens have to deal with this? Because we already have their W9 forms. Don't worry - they dealt with it also.

8) Welcome to doing business internationally. We will all make money together - but we have to follow the rules.

9) We will answer every single question you have - but you have to give us time to get to them.

Jon Oringer
Founder/CEO
Shutterstock Images LLC
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Talanis on May 28, 2009, 13:42
I beat you to it kgtoh ;P
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: borg on May 28, 2009, 13:45
Number 3 is definitely altered on CEO rant post...


Missing:- "will be happy to delete"..
             -"we have already done it  several times" ..

Or something like that, but the meaning is the same...
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: fotografer on May 28, 2009, 13:50
There-s an interesting post in one of the threads by CSProductions
http://submit.shutterstock.com/forum/viewtopic.php?t=62287&postdays=0&postorder=asc&start=420 (http://submit.shutterstock.com/forum/viewtopic.php?t=62287&postdays=0&postorder=asc&start=420)
quote
Actually, SS is getting bad legal advice from their legal counsel. The income tax as administered by the IRS in the greatest hoax ever perpetrated upon a society. The Constitution For the United States limits the income tax laws to a very narrow and priviledged classification of activities. It is the activities that are taxed, and that tax is measured by the amount of income produced by those activities. It is not the income itself that is taxed. Royalties from activities such as those in which we are engaged here on SS are not included in that priviledged classification, so by withholding anything from anyone, SS is making itself subject to a charge of criminal conversion of property, even if it does so at the instruction of the IRS. This hoax is made possible largely by redefining commonly used words and phrases in the tax laws so that they are easily misconstrued and widely missaplied. I strongly recommend the book "Cracking the Code," available from www.LostHorizons.com.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: kgtoh on May 28, 2009, 13:52
 ;D Talanis, you're right. oops.

Borg, you're also right. The current version has been cleaned up to make the CEO look more like a CEO and less like a teenage bully.

Original version (thanks to a poster on the SS forums who quoted the original in a reply):

1) This is a US government regulation. What would you like us to do about it? Go to jail? Go out of business? We are sorry - but we can't just move the company out of the US or creating another company somewhere else to pay you. That is called tax evasion. These are laws. We can't change the laws. We have 60 employees in NYC - they aren't going anywhere.

2) If you follow the rules you won't be double taxed. Your country has rules that we follow every day also. You may need to do a bit of work here, but we will help you out with them. You will have a chance to get your ITIN before we start following regulations and witholding.

3) If you don't want to deal with this, then leave. We are happy to remove all your images for you. If I continue to read threads on the forum that you will be taking your images elsewhere, I will delete them myself and close your account. I've done it a few times already- I am not kidding about this.

4) Online petition claiming we are taxing you? Why would we be taxing you? Again, this is the US government. We are just following the law.

5) Want to change your avatar to something obnoxious? Again, I will personally delete your profile, images, etc. You are just creating more work for us.

6) If you think other microstock companies are except from paying tax, think again. It's a matter of time before they start following the law also.

7) Why don't US citizens have to deal with this? Because we already have their W9 forms. Don't worry - they dealt with it also.

8) Welcome to doing business internationally. We will all make money together - but we have to follow the rules.

9) We will answer every single question you have - but you have to give us time to get to them.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on May 28, 2009, 13:55
There-s an interesting post in one of the threads by CSProductions ... etc ...I strongly recommend the book "Cracking the Code," available from www.LostHorizons.com.

Crazy conspiracy nonsense. You only have to look at the website he links to for about 1 sec to realize that :)

As you were ..
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Inga on May 28, 2009, 14:07
There-s an interesting post in one of the threads by CSProductions ... etc ...I strongly recommend the book "Cracking the Code," available from www.LostHorizons.com.

Crazy conspiracy nonsense. You only have to look at the website he links to for about 1 sec to realize that :)

As you were ..

lol :D
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: MikLav on May 28, 2009, 14:08
Just so you guys know, I posted about this on NiltoMil and Shutterstock almost immediately contacted me offering to answer any questions I can't find answers to (previous life I was in law)... so if you have questions, try to accumulate them here or post them to N2M and I'll submit them when I reply to them.  Hopefully having a direct line to some answers will help everyone.


thanks - I posted my questions there :)
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: e=mg2 on May 28, 2009, 14:08
I'm as "happy" as anyone else with this issue, but if these are the US laws what would you want SS to do?

Should SS stage a Coup-d'etat in US so they could change the Tax Laws at gun point?

What's the part that this is THE LAW OF A SOVEREIGN COUNTRY that you don't understand?

If you work for a company, how would you like for it to move for a different country? Should the employees at SS be thrilled with the idea of having to move to a foreign country and turn their lives upside down so they could keep their job in a time of world crisis just to satisfy a bunch of people who don't take this activity seriously?

I don't like this issue either since I'll have to pay 10% and I already pay the taxes in my country, but this business is getting serious, and I, as a stock photography professional must comply with professional standards. All my income is from stock and so I wont play with issues like taxes and my duties.

Even if people earn 1 dollar per month in SS, that qualifies them in my view as professionals since they earn money from this activity. If you don't want to comply with the professional standards maybe it's time for you to leave microstock for people that take this seriously.

Sorry but as I said I don't like this issue either, I think it could have been better handled but comments are reaching to a point where most people are loosing their credibility. They are starting to sound as irresponsible whining babies.

So, do you also evade taxes in your country like you're demanding SS to do?

Regards,
E=mg2
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: melastmohican on May 28, 2009, 14:09
It sounds like sitting on 7 million images they do not care about individual supplier anymore :-)
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: stockastic on May 28, 2009, 14:30
It sounds like sitting on 7 million images they do not care about individual supplier anymore :-)
Yeah, that much came through loud and clear.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on May 28, 2009, 14:54
So, do you also evade taxes in your country like you're demanding SS to do?

Relocating an international internet based business to a more competitive business environment would not constitute tax evasion.

Jurisdictions compete for business today by making it easy to do business. Because jobs are basically more important than taxing companies. That is perfectly legitimate within a framework of international agreement, best practice and regulation which is mandated by the OECD and, more recently, the G9. This is about creating the conditions for growth.

Regionalizing a business to offset the very negative effects of the anti competitive US legislation would absolutely not constitute evasion. Nor is it especially complicated.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: sharpshot on May 28, 2009, 15:04
I'm as "happy" as anyone else with this issue, but if these are the US laws what would you want SS to do?

Should SS stage a Coup-d'etat in US so they could change the Tax Laws at gun point?

What's the part that this is THE LAW OF A SOVEREIGN COUNTRY that you don't understand?

If you work for a company, how would you like for it to move for a different country? Should the employees at SS be thrilled with the idea of having to move to a foreign country and turn their lives upside down so they could keep their job in a time of world crisis just to satisfy a bunch of people who don't take this activity seriously?

I don't like this issue either since I'll have to pay 10% and I already pay the taxes in my country, but this business is getting serious, and I, as a stock photography professional must comply with professional standards. All my income is from stock and so I wont play with issues like taxes and my duties.

Even if people earn 1 dollar per month in SS, that qualifies them in my view as professionals since they earn money from this activity. If you don't want to comply with the professional standards maybe it's time for you to leave microstock for people that take this seriously.

Sorry but as I said I don't like this issue either, I think it could have been better handled but comments are reaching to a point where most people are loosing their credibility. They are starting to sound as irresponsible whining babies.

So, do you also evade taxes in your country like you're demanding SS to do?

Regards,
E=mg2
I pay taxes in my country and as far I know the stock sites in my country don't withhold 30% tax and make people from selected countries fill out forms to get it back while keeping it from others.

I don't see why SS are doing this when other companies aren't.  Some of them obviously think this is just red tape that can be ignored and others have set up their finances outside the US while keeping their employees in the US.  Snap village were based in Ireland but they are owned by a US company, it can't be that difficult to set up.  It is obvious to me that SS need to look at this again.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: goldenangel on May 28, 2009, 15:07
Can anyone please tell me what a TAX RETURN is ? It states that I should provide the IRS with the W-7 along with my "tax return". What is this? Do I have to include it?
In April of each year, every US person needs to go through their taxes for the previous year and report their income. That is called a tax return.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: melastmohican on May 28, 2009, 15:13
How about opposite, e.g. Alamy is UK based if they pay me do I have to register within British government?

Fortunately I am EU citizen and US resident so I have been registered already, I think?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: ThomasAmby on May 28, 2009, 15:28
Can anyone please tell me what a TAX RETURN is ? It states that I should provide the IRS with the W-7 along with my "tax return". What is this? Do I have to include it?
In April of each year, every US person needs to go through their taxes for the previous year and report their income. That is called a tax return.

Ah, thank you. So this doesn't apply to me as a danish citizen I guess? Should I just ignore it and send in the complete W-7 form a long with the documentation?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on May 28, 2009, 15:37
The counter argument is that the photographers are indivudally doing their business with Shutterstock from their own computers in their home countries. That the business between Shutterstock and the photographer is at the place where the image is uploaded from. Shutterstock is doing business in the US - but the photographers are not.

One solution would potentially be for the photographers to issue invoices to Shutterstock. The invoice originating not in the US.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: cidepix on May 28, 2009, 15:56
The counter argument is that the photographers are indivudally doing their business with Shutterstock from their own computers in their home countries. That the business between Shutterstock and the photographer is at the place where the image is uploaded from. Shutterstock is doing business in the US - but the photographers are not.

One solution would potentially be for the photographers to issue invoices to Shutterstock. The invoice originating not in the US.

Good idea, I hope you don't mind that I just quoted this on SS forum.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: crazychristina on May 28, 2009, 16:12
Given that the two main business models for micro shooters are istock exclusive vs SS+others this whole business has strongly confirmed by decision to go with the former - not because of the tax issue but because of the attitude of SS. A recent campaign by contributors on istock was received with far more grace (and action) than appears to be happening here.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: goldenangel on May 28, 2009, 16:50
Ah, thank you. So this doesn't apply to me as a danish citizen I guess? Should I just ignore it and send in the complete W-7 form a long with the documentation?
Yes. Tax return is not needed. Instead certified or notarized copies of your ID documents are needed.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: michaeldb on May 28, 2009, 17:29
I think the CEO was probably up all night with this problem and flew a bit off the handle today. Such things happen (look at the tone of some posts on here or any microstock sites, are CEOs immune to emotion?).

In defense of SS, they have almost immediately provided a whole forum just to discuss and try to reconcile this problem. And some contributors have threatened and tried to carry out obnoxious protest movements, for example hijacking all the threads in all SS forums, including those which have nothing to do with this problem.

Many contributors are acting as if SS is attacking them with some selfish motive. What would SS's motive be? Obeying the IRS decree is going to cost SS money, even it contributors go along with it without further uproar.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: melastmohican on May 28, 2009, 17:32
Maybe they earned enough money so IRS got interested and audited them?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Inga on May 28, 2009, 18:10
In defense of SS, they have almost immediately provided a whole forum just to discuss and try to reconcile this problem.

where I cannot post, since they baned me ;) And I think I was not alone because I really wasn't among the most emotional posters there. I did not even get a message telling me why exactly I'm baned. Perhaps because I posted a link to the petition there when another user asked what petition everyone was talking about.
I don't think that they should treat contributors that way. Especially when they themselves have problems keeping control of their feelings.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: djmorgan on May 28, 2009, 22:41

For me the real issue is that as an Australian that has a treaty even if I fill in the forms another 5% of what I earn is not going to be given to me, already SS has one of the lowest payment figures and there is an issue where you may have the same image with a number of agencies the buyer will get the cheapest.

So my plan is to wait until the next payment is due then drop SS, probably most of the agencies, take up the exclusive offer with IS and just contribute to IS and Alamy.

David
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Phil on May 28, 2009, 23:09

For me the real issue is that as an Australian that has a treaty even if I fill in the forms another 5% of what I earn is not going to be given to me, already SS has one of the lowest payment figures and there is an issue where you may have the same image with a number of agencies the buyer will get the cheapest.

So my plan is to wait until the next payment is due then drop SS, probably most of the agencies, take up the exclusive offer with IS and just contribute to IS and Alamy.

David

my issue is the cost and hassle of the paperwork, I'll have to get a passport etc to show them. It will take a while for the 30% to 5% difference to make up the costs involved.

you can claim the 5% against foreign income on your tax return (of course assuming you are not considered a hobby by the tax office, in which case then it is just lost, I think)
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: sharpshot on May 29, 2009, 01:44
you can claim the 5% against foreign income on your tax return (of course assuming you are not considered a hobby by the tax office, in which case then it is just lost, I think)
If you pay higher than 30% tax in your own country, I wonder if it is better to let them take 30% in the US and claim against it on your tax form?  Does anyone do this now?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Aetherial on May 29, 2009, 01:55
If you work for a company, how would you like for it to move for a different country? Should the employees at SS be thrilled with the idea of having to move to a foreign country and turn their lives upside down so they could keep their job in a time of world crisis just to satisfy a bunch of people who don't take this activity seriously?

you forget one important thing: IT'S NOT EMPLOYEES OF SHUTTERSTOCK THAT MAKE THE CONTENT THEY'RE SELLING, IT'S THE CONTRIBUTORS, MOSTLY FROM OUT OF US. Employees are just administrators, guys with bunch of servers as someone noticed. Digital Railroad sank, Lucky Oliver sank, Photoshelter sank, Shutterstock will float as long as people making images are making it float, not guys in the board room making insulting posts to their business partners (yes, we're their business partners, vendors that is) on their forum.

if you're fishing for shrimps in the middle of Sahara, of course it makes sense to move somewhere where there are shrimps, even if it is "problem" for you.
Title: ITIN Documents Certification
Post by: stock_fan on May 29, 2009, 02:41
Could SS (or someone) pls explain why this ITIN is required?

I did quite a bit of business via US banks (investment/ brokerage) and they all wanted a W8 form. But never was I required do get an ITIN/ W7.

From what I read so far, it is very difficult to meet the certification requirements to get the iTIN (unless you are a citizen of an English speaking country and living there - certification must be in English language I guess). I am a German Citizen (issuing authority of passport in Germany) living in Australia and the below is seems pretty much impossible to me. Any tips are welcome.

You can submit copies of original documents if you do any of the
following.

Have the copies certified by the issuing agency or official
custodian of the original record.

Have the copies notarized by a U.S. notary public legally
authorized within his or her local jurisdiction to certify that the
document is a true copy of the original. To do this, the notary must
see the valid, unaltered original document and verify that the copy
conforms to the original. Consular offices at U.S. Embassies and
Consulates overseas may not certify true copies of foreign public
documents and will refer applicants to the foreign authority that
issued the document.

Have the copies notarized by a foreign notary. However, foreign
notaries are only acceptable as outlined by the Hague Convention.
The Hague Convention provides for the simplified certification of
public (including notarized) documents to be used in countries that
have joined the Convention. A certification will be issued in the form
of an "apostille," which will be attached to the copy of the
document. If the document originates in a country that is not party to
the Convention, applicants should have the document certified by
the foreign authority that issued it.

Note. The apostille must stay attached to the copy of the document
when it is sent to the IRS.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: e=mg2 on May 29, 2009, 03:20
If you work for a company, how would you like for it to move for a different country? Should the employees at SS be thrilled with the idea of having to move to a foreign country and turn their lives upside down so they could keep their job in a time of world crisis just to satisfy a bunch of people who don't take this activity seriously?

you forget one important thing: IT'S NOT EMPLOYEES OF SHUTTERSTOCK THAT MAKE THE CONTENT THEY'RE SELLING, IT'S THE CONTRIBUTORS, MOSTLY FROM OUT OF US. Employees are just administrators, guys with bunch of servers as someone noticed. Digital Railroad sank, Lucky Oliver sank, Photoshelter sank, Shutterstock will float as long as people making images are making it float, not guys in the board room making insulting posts to their business partners (yes, we're their business partners, vendors that is) on their forum.

if you're fishing for shrimps in the middle of Sahara, of course it makes sense to move somewhere where there are shrimps, even if it is "problem" for you.


I'm sorry to say but the only insults I've read on the forums were from the photographers and not from the SS staff. A real mass hysteria. Totally unprofessional from the photographers part.

90% of those posts were simple insults from people who look at this BUSINESS as a paid hobby with no responsibilities at all. The time of paid hobbies is long gone, now you either take this seriously or you're out. And paying taxes, like it or not is part of a serious business.

I also think this could, and still can, be better handled by SS and I'm not happy paying taxes, but once again we're talking about the law of a sovereign country.

We may not like the decisions taken by the SS administration but the agency is THEIR business and they are entitled to do whatever they want with it. Even sunk it! We have the right to make proposals and try to bend things in our interest but the agency is their business. And they even gave us room to express our opinions! In my former company that didn't happen at all and we all knew physically and contacted daily! So I think SS did an acceptable job here.

And Photography is OUR business, and we're also entitled to do whatever we want, namely, stop submitting to SS and go elsewhere. It's not like there's a shortage of micros out there.

Time will tell about SS decisions. At the end they have the right to run THEIR business (agency), as much as we have the right run OUR business (photography) in the way we want.

e=mc2
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on May 29, 2009, 03:36
you can claim the 5% against foreign income on your tax return (of course assuming you are not considered a hobby by the tax office, in which case then it is just lost, I think)
If you pay higher than 30% tax in your own country, I wonder if it is better to let them take 30% in the US and claim against it on your tax form?  Does anyone do this now?

Problem with this business of offsetting against tax deducted abroad is that it may not be applicable in many countries. Say if a person is bringing in less than the amount which is liable for tax. Or, if a person or a company is tax exempt. Then there is nothing to be offset.

I'm not criticizing SS over this because I doubt they have any choice. If they stay in the US. But what this does seem to demonstrate is that the US is not a good place from which to operate a stock photo business.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: e=mg2 on May 29, 2009, 03:36
I pay taxes in my country and as far I know the stock sites in my country don't withhold 30% tax and make people from selected countries fill out forms to get it back while keeping it from others.

I don't see why SS are doing this when other companies aren't.  Some of them obviously think this is just red tape that can be ignored and others have set up their finances outside the US while keeping their employees in the US.  Snap village were based in Ireland but they are owned by a US company, it can't be that difficult to set up.  It is obvious to me that SS need to look at this again.

What other companies aren't doing this? The "other" companies are in Canada, France, Romania, etc.!

From the Big six only SS, 123rf and BS are in the US. And how do you know that BS and 123rf are not breaking the law by not collecting the taxes? So, who's wrong here? SS or BS and 123rf?

Getty (and thats' GETTY!) and the defunct Photoshelter also withhold the 30% for taxes and they were from USA. Again, who's wrong here? Do you think that a company the size of Getty could get away with a illegality of this size? They would be stealing 30% of hundreds of millions of dollars each year. Do you think that their photographers, many of which earn hundreds of thousands of dollars per year would allow to be "robbed" in 30% of their income? They all would be in another stock agency by now and Getty would be gone!

I don't know about the laws in your country, but that is YOUR country. YOUR country makes the laws the way they want. USA makes the laws the way THEY want. If you don't like it no one is forcing you to accept them. Just leave and submit to the other agencies.

I also don't like to have to pay 10%, but I'm a professional and I must comply with my obligations. The time for happy snappers is gone. Microstock is maturing into a real business and people either step up the game or leave.

If the SS doesn't want to change their accounting to other countries it's their right. They'll suffer the consequences in the end.

e=mc2
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: RT on May 29, 2009, 03:50
The way I've always understood this US tax thing is that they are required to withhold the 30% ONLY from sales originating in the US, i.e. if a European buyer buys an image from me on Getty the tax isn't withheld but if the buyer is from the US it is. Without reading through the hundreds of pages on the SS forum does anybody know if this has been addressed or whether the US tax law has changed?


Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: luceluceluce on May 29, 2009, 04:26
The way I've always understood this US tax thing is that they are required to withhold the 30% ONLY from sales originating in the US, i.e. if a European buyer buys an image from me on Getty the tax isn't withheld but if the buyer is from the US it is. Without reading through the hundreds of pages on the SS forum does anybody know if this has been addressed or whether the US tax law has changed?




Hi,

I've read every page of the threads on the topic.  SS are now investigating this matter further, and have promised to get back to everyone on this.

Keep monitoring the thread because hopefully there will be an update soon.

Unfortunately, i have also been banned from their forum.

lucy x
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: sharpshot on May 29, 2009, 04:41
Every time I look at that thread, some Johnny Nash lyrics enter my head:-

"There are more questions than answers
Pictures in my mind that will not show
There are more questions than answers
And the more I find out the less I know
Yeah, the more I find out the less I know"
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: loop on May 29, 2009, 04:49
The way I've always understood this US tax thing is that they are required to withhold the 30% ONLY from sales originating in the US, i.e. if a European buyer buys an image from me on Getty the tax isn't withheld but if the buyer is from the US it is. Without reading through the hundreds of pages on the SS forum does anybody know if this has been addressed or whether the US tax law has changed?




Yes, that's what Getty does, if I'm not mistaken. Just taxing sales in the U.S. That's important because being sales in US about 50% in volume, 30% goes down to 15%.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Dreamframer on May 29, 2009, 05:13
Lucy, are you banned only from their forum, or your account is totally canceled?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Dreamframer on May 29, 2009, 05:14
loop, are you sure only 50% of sales are US sales? I thought it's much more....about 80%
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: loop on May 29, 2009, 05:57
Not sure completely, but I remember having seen this figure somewhere regarding istockphoto sales. And seeing sales distribution through the day timetable, and sales in just US holiday days (as coming 4th of July) I would say it could be accurate.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: kaycee on May 29, 2009, 06:15
Sad to hear so many get banned over this...
And the fun part is they didn't get insulted or use the f.... words, they only want some clarification. 
Strange policy these days....makes you wonder...
Souns like my old (American)company I worked for...If you don't like it there is the door...And for you 10 others...
Very frustrating...
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: bestshotz on May 29, 2009, 06:29
I know its not SS fault or any other US based Stock Site that the Tax has imposed ... it will only make Non US Based Sites Stronger ... Its a real loss for SS ... with Declining Sales .. the Lowest Royalty Payment Percentage Site on the internet .... just got Lower ... I'm not going to Scream & Cry ... but being one of the Non-Country Treaty Submitters ... 30% Tax even if I jump through the hoops required is just not worth continuing to upload to ....  I wish SS good Luck ... and hope it can make a comeback .. but will lose a huge amount of submitters who are also buyers .. in an already dodgy World Financial climate its not whats needed

Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: shutterdrop on May 29, 2009, 07:39
Business will comply to continue operations or go out of business. This applies to agencies and contributors alike. Professionals will simply fill out the forms and attach their certified copy, because it is their livehood. The amateurs and snap shooters will move on or move out.
I doubt it will greatly effect SS business model. I bet you will not see SS image base sudden drop from 7 million to 6 millions images!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: djmorgan on May 29, 2009, 07:52
Business will comply to continue operations or go out of business. This applies to agencies and contributors alike. Professionals will simply fill out the forms and attach their certified copy, because it is their livehood. The amateurs and snap shooters will move on or move out.
I doubt it will greatly effect SS business model. I bet you will not see SS image base sudden drop from 7 million to 6 millions images!

You don't get it! even after filling and filing the required documents contributors OS will have to pay withholding tax, that is less return on investment from an agency who already pays the less commissions - as a business model this for me means no longer placing my images with this agency, that is not a dummy spit, just a practical business decision on my part, I don't care if SS loose images or not BUT I do think they will loose many OS submitters because of this and not gain to much new blood from OS

David
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: ste7e on May 29, 2009, 08:53
The CEO rant post has been removed.

That´s hilarious :)

Did anyone manage to get a copy of it before it was taken down?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Magnum on May 29, 2009, 08:57
you can claim the 5% against foreign income on your tax return (of course assuming you are not considered a hobby by the tax office, in which case then it is just lost, I think)
If you pay higher than 30% tax in your own country, I wonder if it is better to let them take 30% in the US and claim against it on your tax form?  Does anyone do this now?

I would also like to know this.  I guess each one of us need to call our local IRS and ask.    I have another business so I don´t care if I get 30% of micro at the end of the year.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: ste7e on May 29, 2009, 08:59
The CEO rant post has been removed.

That´s hilarious :)

Did anyone manage to get a copy of it before it was taken down?

Sorry, just caught up with the thread and see that you've got the original rant already recorded.  Good work!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Anyka on May 29, 2009, 09:01

Thank you thank you thank you Leaf for the tip about calling the IRS on the phone!!

I just made that call and it took me exactly 12 minutes to get my EIN number (5 minutes waiting for my turn, rest of the time answering questions).  All they needed was :  my name and address, NOTHING ELSE, not even the VAT number of my company.  I got the number at the end of the call, and I can use it immediately, though it will also be sent to me by mail.  The reason it took 7 minutes just to give my name and address was :  I had to spell every letter twice, and then the nice IRS lady spelled it letter by letter again for checking. 

I am afraid the next step won't be so easy though, because the W8-BEN form uses language that is completely over my head.

Is there any one on-line who could tell me which box/boxes I should tick on this form?
I am a Belgian one-man-business submitting to Shutterstock ...

(a) The beneficial owner is a resident of ...... (Belgium) within the meaning of the income tax treaty between the United States and that country.

(b) If required, the U.S. taxpayer identification number is stated on line 6 (see instructions).

(c) The beneficial owner is not an individual, derives the item (or items) of income for which the treaty benefits are claimed, and, if applicable, meets the requirements of the treaty provision dealing with limitation on benefits.

(d) The beneficial owner is not an individual, is claiming treaty benefits for dividends received from a foreign corporation or interest from a U.S. trade or business of a foreign corporation, and meets qualified resident status.

(e) The beneficial owner is related to the person obligated to pay the income within the meaning of section 267(b) or 707(b), and will file Form 8833 if the amount subject to withholding received during a calendar year exceeds, in the aggregate, $500,000.

I am quite sure (a) and (b) should be ticked, but what about (c) and (d) ?????

Clause 10 is also a mystery to me :
(10) Special rates and conditions (if applicable—see instructions): The beneficial owner is claiming the provisions of Article ........ of the treaty identified on line 9a above to claim a ....... % rate of withholding on (specify type of income): ........................... Explain the reasons the beneficial owner meets the terms of the treaty article:   ...

I wish Shutterstock would just publish a few fake examples ...



Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: luceluceluce on May 29, 2009, 09:08
Lucy, are you banned only from their forum, or your account is totally canceled?

Hi whitechild!

No, they didnt cancel my account... Im just banned from posting in the forums.   I can still read the threads though, and i can still read PMs that people send me. But when i send a pm  - the content is changed to SHUTTERSTOCK-BANNED.

x
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: ste7e on May 29, 2009, 09:16
Lucy, are you banned only from their forum, or your account is totally canceled?

Hi whitechild!

No, they didnt cancel my account... Im just banned from posting in the forums.   I can still read the threads though, and i can still read PMs that people send me. But when i send a pm  - the content is changed to SHUTTERSTOCK-BANNED.

x


What did you do to get banned?

Your posts were all well balanced and considered, in my opinion.  Unless you eventually lost your rag and they removed that post?!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Inga on May 29, 2009, 09:45


Hi whitechild!

No, they didnt cancel my account... Im just banned from posting in the forums.   I can still read the threads though, and i can still read PMs that people send me. But when i send a pm  - the content is changed to SHUTTERSTOCK-BANNED.

x



Did you perhaps post the link to the petition somewhere? I think this is what they hated the most. This is my only explanation why I was banned myself...


EDIT: they suspended the account of the user who started the petition.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Karimala on May 29, 2009, 10:00
I think Lucy's banning was probably due to her avatar. 

The good news is the bans are rarely permanent.  I've only seen a permanent ban once in almost four years with SS (remember The Miz?).  Eventually, after everything settles down, almost everyone who was banned will be allowed to return to the forums.  The only exceptions will be those folks who had four previous warnings/bannings over misconduct. 

I'm actually surprised more people weren't banned.  The level of outrage over something SS has no control over, plus the ensuing misinformation that was being spread, was pretty ridiculous and very unprofessional on the part of some of the contributors.  Thank goodness calmer heads prevailed over here at Microstockgroup where accurate information can be shared. 
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Magnum on May 29, 2009, 10:25

Thank you thank you thank you Leaf for the tip about calling the IRS on the phone!!

I just made that call and it took me exactly 12 minutes to get my EIN number (5 minutes waiting for my turn, rest of the time answering questions).  All they needed was :  my name and address, NOTHING ELSE, not even the VAT number of my company.  I got the number at the end of the call, and I can use it immediately, though it will also be sent to me by mail.  The reason it took 7 minutes just to give my name and address was :  I had to spell every letter twice, and then the nice IRS lady spelled it letter by letter again for checking. 

I am afraid the next step won't be so easy though, because the W8-BEN form uses language that is completely over my head.

Is there any one on-line who could tell me which box/boxes I should tick on this form?
I am a Belgian one-man-business submitting to Shutterstock ...

(a) The beneficial owner is a resident of ...... (Belgium) within the meaning of the income tax treaty between the United States and that country.

(b) If required, the U.S. taxpayer identification number is stated on line 6 (see instructions).

(c) The beneficial owner is not an individual, derives the item (or items) of income for which the treaty benefits are claimed, and, if applicable, meets the requirements of the treaty provision dealing with limitation on benefits.

(d) The beneficial owner is not an individual, is claiming treaty benefits for dividends received from a foreign corporation or interest from a U.S. trade or business of a foreign corporation, and meets qualified resident status.

(e) The beneficial owner is related to the person obligated to pay the income within the meaning of section 267(b) or 707(b), and will file Form 8833 if the amount subject to withholding received during a calendar year exceeds, in the aggregate, $500,000.

I am quite sure (a) and (b) should be ticked, but what about (c) and (d) ?????

Clause 10 is also a mystery to me :
(10) Special rates and conditions (if applicable—see instructions): The beneficial owner is claiming the provisions of Article ........ of the treaty identified on line 9a above to claim a ....... % rate of withholding on (specify type of income): ........................... Explain the reasons the beneficial owner meets the terms of the treaty article:   ...

I wish Shutterstock would just publish a few fake examples ...





It´s good it´s actually working. No hassle with notarized id :)  I´m gonna make the call today.   I wonder why they don´t need proof of existens for companies?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: sharpshot on May 29, 2009, 10:53
Have SS said they will accept an EIN number?  I can only see them asking for an ITIN number.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Ploink on May 29, 2009, 11:00
Have SS said they will accept an EIN number?  I can only see them asking for an ITIN number.
I, and some other people, asked that very question in the ongoing thread on the SS-forum - No reply yet, their approach to answering contributors' questions is a bit, shall we say "unstructured"  ;)
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: PeterChigmaroff on May 29, 2009, 11:01
Have SS said they will accept an EIN number?  I can only see them asking for an ITIN number.

They really should. A company has to be able to deal with a company.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Magnum on May 29, 2009, 11:03
Have SS said they will accept an EIN number?  I can only see them asking for an ITIN number.

What do Leaf say? Leaf!!!!! :)  

He was the one mention it from the beginning
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Opla on May 29, 2009, 11:09

Thank you thank you thank you Leaf for the tip about calling the IRS on the phone!!

I just made that call and it took me exactly 12 minutes to get my EIN number (5 minutes waiting for my turn, rest of the time answering questions).  All they needed was :  my name and address, NOTHING ELSE, not even the VAT number of my company.  I got the number at the end of the call, and I can use it immediately, though it will also be sent to me by mail.  The reason it took 7 minutes just to give my name and address was :  I had to spell every letter twice, and then the nice IRS lady spelled it letter by letter again for checking. 

This morning I went to the city hall to get my passport copied and certified. Turned out the waiting time was about 1.5 hr. Probably all Dutch SS-photograhpers live in Spijkenisse and are simultaneously getting their copies certified. So I left and found this post, phoned the IRS and got my number in 11 minutes 4 seconds, all she wanted were the tradenames of my company and my name and address.
Leaf, although I misread your post on this (thought you meant you could phone the IRS for the number after you sent the form) I think you should win the check for most useful poster :) Split it with Anyka  ;D
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: luceluceluce on May 29, 2009, 11:32
Im really hopeful about what Im reading on the SS thread about this issue.

They said they are working on ways to delay the withholding until we're all able to get the paperwork ready. And, as mentioned before, they're investigating the issue of US v non-US downloads...

So hopefully it won't hit non-treaty countries so hard... (and the rest of us who 'possibly' cant get this dang number, but what to do)

Wow, i wonder if you stacked up all the paperwork that us photographers will have to do to get an ITIN, i wonder if it would reach to the moon? I mean, if you do that with pennies on a chessboard apparently it will reach 3.4 light years high. Or something like that, i forget.

Another great thing is how much information there is out there about how to go about this thing... (bravi forums)

: ) x

ps. i didn't lose my rag, but i do feel a worrying absence of a marble somewhere... x
pps.  do IRS accept an application without a full set of notarised and apostilled marbles?

Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Opla on May 29, 2009, 12:56
NEW!

Get you EIN on-line  8)

https://sa1.www4.irs.gov/modiein/individual/index.jsp

Should save some cost...
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: corepics on May 29, 2009, 13:02

NEW!

Get you EIN on-line  8)

https://sa1.www4.irs.gov/modiein/individual/index.jsp

Should save some cost...

Restrictions:

The business location must be within the United States or U.S. territories.
Foreign filers without an Individual Taxpayer Identification Number (ITIN) cannot use this assistant to obtain an EIN.
If you were incorporated outside of the United States or the U.S. territories, you cannot apply for an EIN online. Please call us at 215-516-6999 (this is not a toll free number).
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Opla on May 29, 2009, 13:07
Pitty...
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: mantonino on May 29, 2009, 13:19
Have SS said they will accept an EIN number?  I can only see them asking for an ITIN number.

Shutterstock only cares that you can get a W-8BEN.  The EIN is acceptable for the W-8BEN form so yes,  you can use an EIN.  I have confirmed this with multiple sources all of whom agree that all you need for W-8BEN (the ultimate answer) is an ID number. Can be SSN, EIN or ITIN.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: gaja on May 29, 2009, 15:08
you can claim the 5% against foreign income on your tax return (of course assuming you are not considered a hobby by the tax office, in which case then it is just lost, I think)
If you pay higher than 30% tax in your own country, I wonder if it is better to let them take 30% in the US and claim against it on your tax form?  Does anyone do this now?

I would also like to know this.  I guess each one of us need to call our local IRS and ask.    I have another business so I don´t care if I get 30% of micro at the end of the year.


I have no concern with the SS situation, but this I can probably give an answer to. I had income in another Nordic country one year. They taxed me in that country, I entered the foreign income and foreign tax in my Norwegian tax returns. I was supposed to get a refund, but got double tax instead. Very funny, the total tax was about 70%.

If your local "IRS" does it correctly, you enter all you income, get a total tax, and withdraw the tax that has already been paid nationally and abroad. If they get confused, you have a lot of work in front of you.
You will never get less than the normal tax level.

In numbers:
Income 2008: 10 000
National tax prepaid 2008: 1000
Tax paid abroad (country with exchange agreement): 2500
Normal tax level: 45% = 4500.

Tax owed: 4500 - 1000 - 2500 = 1000.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: swedstock on May 29, 2009, 15:22
I also have my own business and is wondering if I should get ITIN or EIN. There could be future problems with the EIN. I read somewhere that you may have to lodge a tax return each year to IRS if you have income with EIN. That could mean more paperwork and even more hazzle than to just get the ITIN. Anyone knows anything about this????
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Magnum on May 29, 2009, 16:24
Before calling I recommend doing the form ss4 at irs.gov     Otherwise you might have problem understanding some of the questions asked.  It´s simple stuff when you are prepared.  I waited 30 min for a stressed up guy that told me I needed to do this before calling.      Not all will have the luck of Anyka, who got the nice lady. 
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: RT on May 29, 2009, 16:40
Before calling I recommend doing the form ss4 at irs.gov     Otherwise you might have problem understanding some of the questions asked.  It´s simple stuff when you are prepared.  I waited 30 min for a stressed up guy that told me I needed to do this before calling.      Not all will have the luck of Anyka, who got the nice lady. 

Actually I think you may have got the 'jobs worth', when I got my EIN number it was the exact same experience as Leaf and Anyka, a quick phonecall, a few questions about my business and then my number was issued. Of course you need to have a business and give the right answers to the questions.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: sharpshot on May 29, 2009, 16:48
There is no way I am going to apply for an ITIN number until I see that others have been successful using the SS email.  Look at this post in the SS forum, looks like he went through the same thing with photoshelter and it didn't work.

http://submit.shutterstock.com/forum/viewtopic.php?p=954203&highlight=#954203

Hopefully the EIN number will be sufficient and I will get one of them if SS accept it.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Magnum on May 29, 2009, 17:02
Before calling I recommend doing the form ss4 at irs.gov     Otherwise you might have problem understanding some of the questions asked.  It´s simple stuff when you are prepared.  I waited 30 min for a stressed up guy that told me I needed to do this before calling.      Not all will have the luck of Anyka, who got the nice lady. 

Actually I think you may have got the 'jobs worth', when I got my EIN number it was the exact same experience as Leaf and Anyka, a quick phonecall, a few questions about my business and then my number was issued. Of course you need to have a business and give the right answers to the questions.

I had never heard the word "sole proprietor" .  And he had no time explaining.    I would have understand I he had 20 sec to explain.   
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Sean Locke Photography on May 29, 2009, 17:45
Of course, I'm not involved with all this, but I saw this post:
"So this is where it ends. After 3 years, I think is time to close my SS, account or at least I will delete my images, since I am not going to pay taxes to a country where I do not live. Taxes are paid to pay roads, public services, hospitals etc., and since I don't live in the US I DO NOT HAVE TO PAY FOR THOSE."

It does make sense to me.  How (in the big picture) does the US justify a claim on income earned by someone who does not live in this country?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: GeoPappas on May 29, 2009, 18:12
Of course, I'm not involved with all this, but I saw this post:
"So this is where it ends. After 3 years, I think is time to close my SS, account or at least I will delete my images, since I am not going to pay taxes to a country where I do not live. Taxes are paid to pay roads, public services, hospitals etc., and since I don't live in the US I DO NOT HAVE TO PAY FOR THOSE."

It does make sense to me.  How (in the big picture) does the US justify a claim on income earned by someone who does not live in this country?

sjlocke:

First, as you are fully aware, the Internet was created by the United States under the supervision of Nobel Peace Prize Laureate Al Gore.  There would be no such thing as the Internet if it weren't for good old Al.  Since the U.S. created the Internet, it is only fair that it reaps the rewards from any commerce done over the Internet.  ;)

Second, SS employees benefit from many of the services that you mentioned (roads, public services, hospitals etc).  SS could not be one of the largest microstock agencies in the world if it weren't for the U.S. infrastructure.  :D

Third, someone needs to pay for the brand new Internet Czar and Internet agency that is being created (to shut down the Internet when all of those angry artists decide that they want to attack the U.S. with a new virus).  The U.S. has spent over $10 trillion in the past few months on trying to save the world and is almost bankrupt.  They need everyone else's help.  I'm sure that those citizens that live in Socialist or Communist countries can understand the concept of sharing.  I think that it is better to ask for help, then for the U.S. to just send troops to those countries and take what is rightfully theirs in the first place.  :)

Fourth, these taxes are meant to help foreigners (to the U.S.) and help to reduce their tax burden.  If it weren't for these treaties, foreigners would be taxed at much higher rates.  So foreigners should really thank the U.S. for helping them out.  ;D

Finally, it paves the way for SS (and other microstock agencies) to introduce its next benefit to contributors: free images.  You see, if you give away your images, then you won't have to pay taxes on them.  I have inside information that this new license will be called the Tax Free (or TF) license.  The TF license will take the microstock world by storm.  :o

 :P


Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Dreamframer on May 29, 2009, 18:13
Will Getty do the same one day?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on May 29, 2009, 18:17
How (in the big picture) does the US justify a claim on income earned by someone who does not live in this country?

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.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on May 29, 2009, 18:18
Will Getty do the same one day?

Getty already requires this paperwork.

edit2!: meaning Getty the brand - as opposed to the group in general. I think that applies to everyone
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: digiology on May 29, 2009, 18:20
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
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Magnum on May 29, 2009, 18:42
" Shutterstock will withhold taxes on U.S. Source Income only" So the 30% off doesn´t exist anymore for foreign contributors outside Us?   for some it´s still around 10% though.   Is this correct? 
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: PeterChigmaroff on May 29, 2009, 19:05
[
First, as you are fully aware, the Internet was created by the United States under the supervision of Nobel Peace Prize Laureate Al Gore.  There would be no such thing as the Internet if it weren't for good old Al.  Since the U.S. created the Internet, it is only fair that it reaps the rewards from any commerce done over the Internet.  ;)





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.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: snaprender on May 29, 2009, 19:06
I believe what that means is that if the buyer is in the US - you will get taxed the 30% if you dont get your ITIN and W8 to them (or 30% if your country has no treaty with the US)

If the buyer is not from the US (lets say the buyer is from Europe) you will not be taxed at all even if you dont get your ITIN and W8 done.

Thats how I am reading it.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: digiology on May 29, 2009, 19:11
I believe what that means is that if the buyer is in the US - you will get taxed the 30% if you dont get your ITIN and W8 to them (or 30% if your country has no treaty with the US)

If the buyer is not from the US (lets say the buyer is from Europe) you will not be taxed at all even if you dont get your ITIN and W8 done.

Thats how I am reading it.

me too... and I am sure glad I have these forums to help sort it all out
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Talanis on May 29, 2009, 19:48
I believe what that means is that if the buyer is in the US - you will get taxed the 30% if you dont get your ITIN and W8 to them (or 30% if your country has no treaty with the US)

If the buyer is not from the US (lets say the buyer is from Europe) you will not be taxed at all even if you dont get your ITIN and W8 done.

Thats how I am reading it.

me too... and I am sure glad I have these forums to help sort it all out
That's my understanding too.

So if you sell for 300$ in a month and from that, 100$ was buy by US-citizens, They would withold 30$ to send to the IRS instead of 90$ (if you don't have the forms completed or if you live in a country wihout a treaty with the USA).
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: sharpshot on May 30, 2009, 01:51
..First, as you are fully aware, the Internet was created by the United States under the supervision of Nobel Peace Prize Laureate Al Gore.  There would be no such thing as the Internet if it weren't for good old Al.  Since the U.S. created the Internet, it is only fair that it reaps the rewards from any commerce done over the Internet.  ;)
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 :)
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: djmorgan on May 30, 2009, 01:54
Maybe there will be another opt out button! sell/don't sell US residents.... then we'll get hit with discrimination  :-\

Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: KiwiRob on May 30, 2009, 02:33
Yeah, it sucks for non-US contributors, but...it's the cost of doing business.

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.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: e=mg2 on May 30, 2009, 03:23
Will Getty do the same one day?

As much as I know they already do it for a long time...
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Magnum on May 30, 2009, 03:28
Yeah, it sucks for non-US contributors, but...it's the cost of doing business.

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. 
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Inga on May 30, 2009, 05:33
haven't received a single email from them yet!!  ???

This update sounds good and it would be interesting to know how many sales are made by US-buyers. 20, 50 or 80%?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Magnum on May 30, 2009, 08:31
I believe what that means is that if the buyer is in the US - you will get taxed the 30% if you dont get your ITIN and W8 to them (or 30% if your country has no treaty with the US)

If the buyer is not from the US (lets say the buyer is from Europe) you will not be taxed at all even if you dont get your ITIN and W8 done.

Thats how I am reading it.

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.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: airphoto.gr on May 30, 2009, 08:46

Just got another email now:




There's a lesson SS should learn:

Don't make a public announcement that will irritate people, unless you've double-checked and prepared everything.
Going back and forth, looking unprepared and is NOT Professional.

 
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Dreamframer on May 30, 2009, 08:49
Non US contributors are great majority of all contributors. 
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Peter on May 30, 2009, 09:00
so?

more important thing is how many NON-US buyers are there.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: luceluceluce on May 30, 2009, 10:15
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. 
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: KiwiRob on May 30, 2009, 10:49
Non US contributors are great majority of all contributors. 

I also believe that the vast majority of buyers are also from the US, most of my sales from all the sites I belong to come within the US work day, not the European.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: gostwyck on May 30, 2009, 11:38
I'm actually surprised more people weren't banned.  The level of outrage over something SS has no control over, plus the ensuing misinformation that was being spread, was pretty ridiculous and very unprofessional on the part of some of the contributors.  Thank goodness calmer heads prevailed over here at Microstockgroup where accurate information can be shared. 

Absolutely __ well said. The hysterical outbursts were ridiculous.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Sean Locke Photography on May 30, 2009, 13:12
I think the outbursts were understandable.  Here is everything, business as usual, when suddenly, SS drops this thing on them.  It isn't like some new law was enacted.  It's having to deal with something that wasn't there the day before, just because SS out of the blue suddenly thinks they might have some issue with it.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: gostwyck on May 30, 2009, 13:40
I think the outbursts were understandable.  Here is everything, business as usual, when suddenly, SS drops this thing on them.  It isn't like some new law was enacted.  It's having to deal with something that wasn't there the day before, just because SS out of the blue suddenly thinks they might have some issue with it.

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.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: PeterChigmaroff on May 30, 2009, 13:53

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

That's for sure. It's one thing to have to jump through a hoop or two, it's another to have no choice.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Phil on May 30, 2009, 18:12
How (in the big picture) does the US justify a claim on income earned by someone who does not live in this country?

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.

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.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Dreamframer on May 30, 2009, 19:00
Great majority of contributors are not from US. Many (and I mean MANY) very important contributors are from eastern Europe. So, I wouldn't be happy if they leave, because Shutterstock will be pretty empty, and those who stay won't be able to attract so many buyers.
I don't want this to happen.

I am from Serbia, and I have only two choices:

1. To give 30% of my income to USA
2. To leave Shutterstock

This law is not new, it's pretty old actually.
I would like all this to finish in a good way for us, but I am not very optimistic...
To be honest, when I saw the post of SS CEO I was in shock and I was very disappointed. I really didn't expect that kind of reaction.. Even now I don't expect something much better for us.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Lizard on May 30, 2009, 19:22
..First, as you are fully aware, the Internet was created by the United States under the supervision of Nobel Peace Prize Laureate Al Gore.  There would be no such thing as the Internet if it weren't for good old Al.  Since the U.S. created the Internet, it is only fair that it reaps the rewards from any commerce done over the Internet.  ;)
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 :)

Ever heard of Tesla , with your logic about rewards based on his patents  somebody would own something to this part of the world big time , probably for every single button that was pushed in the world today , and that would not be all
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: crazychristina on May 30, 2009, 19:27
..First, as you are fully aware, the Internet was created by the United States under the supervision of Nobel Peace Prize Laureate Al Gore.  There would be no such thing as the Internet if it weren't for good old Al.  Since the U.S. created the Internet, it is only fair that it reaps the rewards from any commerce done over the Internet.  ;)
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 :)

Ever heard of Tesla , with your logic about rewards based on his patents  somebody would own something to this part of the world big time , probably for every single button that was pushed in the world today , and that would not be all
What about Michael Faraday?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Dreamframer on May 30, 2009, 19:32
Guys, wasn't GeoPappas just ironic? :)
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Lizard on May 30, 2009, 19:34
I'm actually surprised more people weren't banned.  The level of outrage over something SS has no control over, plus the ensuing misinformation that was being spread, was pretty ridiculous and very unprofessional on the part of some of the contributors.  Thank goodness calmer heads prevailed over here at Microstockgroup where accurate information can be shared. 

Absolutely __ well said. The hysterical outbursts were ridiculous.

If it weren't for contributors that part of taxing only sales from US buyers would not be mentioned ,they didnt have an answer on
most important questions ...and first reaction on contributors unprofessional behavior was especially  professional  

I agree with that part that something was ridiculous
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: null on May 30, 2009, 21:53
The CEO rant post has been removed.
That´s hilarious :)

Perhaps he was banned  ;D
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: null on May 30, 2009, 22:11
Quickly over-reading all this some logical issues popped up in my mind.

1. Taxes have to be paid since buyers deduct their costs from their own taxes. The problem is with non-US buyers that deduct the costs from their government's taxes but that's not a contributor's issue.

2. By taxing gross income and not net income, the IRS denies the costs involved in making the images. For many contributors, costs are probably higher than their income. The IRS considers royalties as "passive" income. It's not. The right way should be that contributors are taxed in their own country where they also have the means to deduct their costs.

3. The red tape involved in all this is huge, depending on your nationality, place of residence and fiscal status. SS could help by negotiating a group deal with the IRS where they handle all the red tape themselves, after collecting passport copies (certified or not).
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Sean Locke Photography on May 30, 2009, 22:37
Guys, wasn't GeoPappas just ironic? :)

Yeah, I thought he was being funny as well.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alpy7 on May 30, 2009, 23:09
Quickly over-reading all this some logical issues popped up in my mind.

1. Taxes have to be paid since buyers deduct their costs from their own taxes. The problem is with non-US buyers that deduct the costs from their government's taxes but that's not a contributor's issue.

2. By taxing gross income and not net income, the IRS denies the costs involved in making the images. For many contributors, costs are probably higher than their income. The IRS considers royalties as "passive" income. It's not. The right way should be that contributors are taxed in their own country where they also have the means to deduct their costs.

3. The red tape involved in all this is huge, depending on your nationality, place of residence and fiscal status. SS could help by negotiating a group deal with the IRS where they handle all the red tape themselves, after collecting passport copies (certified or not).

#2 doesn't sound true as deduction are taken off gross income. You are then taxed on the adjusted gross income.
I'm guessing it would be the same for the companies/people buying the from SS. It would be an expense that comes off of the gross income.

Red tape is probably just as big a problem for Americans wanting to do business in other countries. I know from US to Canada isn't a picnic either. Lots of red tape there.  People are just going to have to do what needs to be done for them. It sucks, but with the slow economy here I imagine the government is coming up short and started looking for the missing taxes.  SS won't be the last stop on the IRS' rampage.
 Good luck to all. Don't give up.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: crazychristina on May 31, 2009, 01:22
I doubt that SS will be deducting your expenses (gear, models, travel, whatever) before calculating the withholding tax.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: KiwiRob on May 31, 2009, 01:24
I'm actually surprised more people weren't banned.  The level of outrage over something SS has no control over, plus the ensuing misinformation that was being spread, was pretty ridiculous and very unprofessional on the part of some of the contributors.  Thank goodness calmer heads prevailed over here at Microstockgroup where accurate information can be shared. 

SS do have control over it, Jon could move the company offshore like all his competition, then the problem would go away. This issus is probably the reason why the majority of MS agencies aren't located in the US. You have to feel for those who live in non treaty countries, loosing 30% of bugger all really would make one question the worth of joing SS.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Anyka on May 31, 2009, 01:27
In theory - and I really mean IN THEORY, cause I have not tested this of course, and I am talking about the Belgian tax situation, which happens to be one of the countries where one pays A LOT of taxes :

1. Most contributors still have another income, and this income (let's call it JOB INCOME) is probably higher than Microstock income.
2. That means Microstock income and Job income are added together to be taxed in your own country (let's assume at an average percent of 25%).
3. You send in your tax return to your country's government, and deduct your expenses.
4. Now this gets tricky :  indeed, many of us have more photography expenses than photography income, yet we do not deduct every expense, for the simple reason that if you would do that, you would have a negative microstock income, and the Tax Inspectors would accept that for your first start-up year, but not every year.  So let's assume your job gives you a net income of 20.000 (dollars, pounds, euros, not important), and your photography an income of 10.000 minus 7.000 expenses = net income of 3.000.  3000 extra income x 25% local taxes = 750 to be paid extra to your government.
5. Shutterstock pays you 10.000, of which 50% is of US buyers, so 5.000 x 30% = minus 1500, so you are paid 8500 instead of 10.000.
6. On your tax return, you put the 7000 expenses, but also the 1500 prepaid taxes.
7. 750 national taxes minus 1500 prepaid taxes = less than 0, so you don't have to pay anything to your local government anymore (at least for your photography income).
8. As I understand the treaty system, every country on the treaty list agreed to avoid double taxing of their citizens, but I don't think that all these countries pay eachother what they collected.  So the USA will not pay the 1500 to Belgium, and Belgium will not pay to the USA what they collected from US people living in Belgium.
9. That means that in the end, you will have paid 1500 + 0 local taxes, which is more than 25% on my net photography income.
10. Conclusion :  if your country has a treaty, you MUST do the paperwork, so that Shutterstock will not deduct anything.  If not (like Serbia?), you should absolutely find out how to report the pre-paid US taxes on your national tax return, and which documents are needed to prove it.

I repeat, this is purely theoretical.  Any one here who can back up the theory ?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Eyedesign on May 31, 2009, 06:08
I've been dealing with this for the last 20 years and that how it works.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alpy7 on May 31, 2009, 09:36
I doubt that SS will be deducting your expenses (gear, models, travel, whatever) before calculating the withholding tax.
Individuals will need to do their own tax returns to do this. I would think if someone gets stuck paying the 30% tax, that in theory you would also be able to (may be required to) file a tax return. Which is where you calculate the taxes actually owed.  Any overpayment would be refunded.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: luceluceluce on May 31, 2009, 14:55
I'm actually surprised more people weren't banned.  The level of outrage over something SS has no control over, plus the ensuing misinformation that was being spread, was pretty ridiculous and very unprofessional on the part of some of the contributors.  Thank goodness calmer heads prevailed over here at Microstockgroup where accurate information can be shared. 

SS do have control over it, Jon could move the company offshore like all his competition, then the problem would go away. This issus is probably the reason why the majority of MS agencies aren't located in the US. You have to feel for those who live in non treaty countries, loosing 30% of bugger all really would make one question the worth of joing SS.

From what i gather, and to the best of my knowledge of the information available, and conceding that i may be incorrect.... SS have confirmed in their forum that they are not considering the option of opening an offshore office. However, please check SS official policy with regard to this - I cannot make claims about the factual accuracy of this information.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: evan_ers on May 31, 2009, 15:42
I'm actually surprised more people weren't banned.  The level of outrage over something SS has no control over, plus the ensuing misinformation that was being spread, was pretty ridiculous and very unprofessional on the part of some of the contributors.  Thank goodness calmer heads prevailed over here at Microstockgroup where accurate information can be shared. 

SS do have control over it, Jon could move the company offshore like all his competition, then the problem would go away. This issus is probably the reason why the majority of MS agencies aren't located in the US. You have to feel for those who live in non treaty countries, loosing 30% of bugger all really would make one question the worth of joing SS.

From what i gather, and to the best of my knowledge of the information available, and conceding that i may be incorrect.... SS have confirmed in their forum that they are not considering the option of opening an offshore office. However, please check SS official policy with regard to this - I cannot make claims about the factual accuracy of this information.
Hi Lucy, sorry to see you were silenced at SS Is that permanent?

Yes, I read somewhere that SS won't be setting up off-shore offices. The problem is, if the IRS perceives that a new office was set up to avoid taxation, they will charge SS with tax evasion. Which would probably put SS out of business. If SS had opened an office somewhere else BEFORE all this mess, then it would not have the "appearance" of evading taxes. But it's too late now.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Bateleur on May 31, 2009, 15:50
I believe what that means is that if the buyer is in the US - you will get taxed the 30% if you dont get your ITIN and W8 to them (or 30% if your country has no treaty with the US)

If the buyer is not from the US (lets say the buyer is from Europe) you will not be taxed at all even if you dont get your ITIN and W8 done.

Thats how I am reading it.

That's how I understand it too.

So, surely it shouldn't be too difficult for Shutterstock to introduce an 'opt out of selling to US buyers' box, just as they have opt in/out choices for Per picture sales / Partners, CD-A-Month Service, Enhanced License and so on.

However, from what I understand reading the forums, they are not considering this at all.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Bateleur on May 31, 2009, 16:08

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


Absolutely agree. I have no connection at all with the USA, never been there, no intention of going, and I don't see why I should pay any money, no matter how little, into their Government coffers.

I mean ... apart from anything else ... aren't they already the richest country in the world? Why do they need to suck in money from others, many of whom live in far poorer countries and, like me have no connection with the US?

I don't wish to give the US Government a pile of my personal data, either. I declined an offer to join another US agency for that reason.

I'm seriously considering pulling my portfolio from SS.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Gizeh on May 31, 2009, 16:54
Could it be that most critics of the US withholding tax have never before declared their income to their local fiscal authorities and for the first time realize that microstock is a business and that tax fraud is a crime?

Withholding taxes do exist in a lot of countries and you get back overpaid amounts when filling out your yearly tax declaration.  Why should a honest taxpayer have a problem with that?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: luceluceluce on May 31, 2009, 17:08
I'm actually surprised more people weren't banned.  The level of outrage over something SS has no control over, plus the ensuing misinformation that was being spread, was pretty ridiculous and very unprofessional on the part of some of the contributors.  Thank goodness calmer heads prevailed over here at Microstockgroup where accurate information can be shared. 

SS do have control over it, Jon could move the company offshore like all his competition, then the problem would go away. This issus is probably the reason why the majority of MS agencies aren't located in the US. You have to feel for those who live in non treaty countries, loosing 30% of bugger all really would make one question the worth of joing SS.

From what i gather, and to the best of my knowledge of the information available, and conceding that i may be incorrect.... SS have confirmed in their forum that they are not considering the option of opening an offshore office. However, please check SS official policy with regard to this - I cannot make claims about the factual accuracy of this information.
Hi Lucy, sorry to see you were silenced at SS Is that permanent?

Yes, I read somewhere that SS won't be setting up off-shore offices. The problem is, if the IRS perceives that a new office was set up to avoid taxation, they will charge SS with tax evasion. Which would probably put SS out of business. If SS had opened an office somewhere else BEFORE all this mess, then it would not have the "appearance" of evading taxes. But it's too late now.
Eva_ers! : ) : ) : ) : ) : ) : ) - u r officially a 6 smiley funny guy

Also........ the question is still being raised about referral income.  Which would multiple the tax complexities exponentially.  (check me out using big words when i fundamentally know crap all about tax complexities!)

Doesnt it need superhuge department of accountants and lawyers to figure it all out?  I wouldn't put my money on the off-shore or the opt-out options being dead yet....

Somebody made the v good point that the UK stopped withholding tax on royalties because they found it damaged home-grown industries...  Let us hope this is not the start of the 'taxing of the internet' - because the tax departments of other countries might follow suit - and then we'll ALL be multiplyhorrifically taxed
x
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: dunsmore on May 31, 2009, 17:12
Could it be that most critics of the US withholding tax have never before declared their income to their local fiscal authorities and for the first time realize that microstock is a business and that tax fraud is a crime?

ummm... NO!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Gizeh on May 31, 2009, 17:16
I have no connection at all with the USA.


Who if not you took the decision to sell your images in the US and sign a contract with a US company called Shutterstock?

If microstock only works with financial headquarters in shady offshore locations then I would question if it is a healthy business model at all.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: luceluceluce on May 31, 2009, 17:20
Could it be that most critics of the US withholding tax have never before declared their income to their local fiscal authorities and for the first time realize that microstock is a business and that tax fraud is a crime?

Withholding taxes do exist in a lot of countries and you get back overpaid amounts when filling out your yearly tax declaration.  Why should a honest taxpayer have a problem with that?

Aaah! the 'methinks the lady doth protest too much' argument.  I think in any group of people, microstocker, fishmongers, whatever, you find similar ratios of cooperators to cheaters.

I do not believe that any conclusions can be reached about the honesty of the critics of the tax, if your only evidence is merely the fact that they are 'critics'. The connection is so spurious that Im
utterly
curious
why it's your belief
that i could be a thief .

: )  cmon! play fair
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: evan_ers on May 31, 2009, 18:07
... Let us hope this is not the start of the 'taxing of the internet' - because the tax departments of other countries might follow suit - and then we'll ALL be multiplyhorrifically taxed
x

I'm afraid it's only a matter of time before governments figure out a way to tax internet commerce. There is so much money being made over the 'net, governments are positively drooling to get their hands on it. As I heard on the radio once, "Money is the politicians' drug of choice."
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: evan_ers on May 31, 2009, 18:11
Oh, and Lucy, thanks for all the smileys. I will send an official application to you to recoup my other two as soon as I have my W8EN (W8 Emoticon Number).
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: hqimages on May 31, 2009, 18:23
Could it be that most critics of the US withholding tax have never before declared their income to their local fiscal authorities and for the first time realize that microstock is a business and that tax fraud is a crime?

Withholding taxes do exist in a lot of countries and you get back overpaid amounts when filling out your yearly tax declaration.  Why should a honest taxpayer have a problem with that?

I can only speak for myself here, but I had a major problem with it and withdrew my gallery, and my account from SS. I am an honest Irish taxpayer, I have a company here which involves twice monthly VAT statements to revenue (+ cheque), and an annual tax return.. for me to register for tax in a foreign country on money I already pay tax on in Ireland, is ridiculous to me, the fact that I would have to give a notarised copy of my passport to that foreign country, and they would be furnished by SS with my financial info too to get OUT of paying tax twice, was too much for me. I already gave SS a copy of my passport when I joined, and that's all anyone gets out of me.

For all anyone knows, you will have to now do a second annual tax return for the US if you have a registered tax number, or what happens if you stop making money, do you have to prove to them you're not undertaking activities in their country? This will come back to bite everyone in the bum believe me, SS is not worth it to bring yourself to the attention of US revenue.. so I just had to say that because you're wrong in your assumption. In many cases it is the people who are already paying tax in their income in their own country that are most pissed off..
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: crazychristina on May 31, 2009, 20:29
Add to that people such as myself who would be paying tax on gross income with no way to claim expenses given the current level of business I'm doing. I'm currently running at a loss while I invest in growing my portfolio (not on SS, thankfull). Why should I pay tax on gross when I'm running at a loss?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: gbalex on May 31, 2009, 22:49
I'm actually surprised more people weren't banned.  The level of outrage over something SS has no control over, plus the ensuing misinformation that was being spread, was pretty ridiculous and very unprofessional on the part of some of the contributors.  Thank goodness calmer heads prevailed over here at Microstockgroup where accurate information can be shared. 


SS do have control over it, Jon could move the company offshore like all his competition, then the problem would go away. This issus is probably the reason why the majority of MS agencies aren't located in the US. You have to feel for those who live in non treaty countries, loosing 30% of bugger all really would make one question the worth of joing SS.


From what i gather, and to the best of my knowledge of the information available, and conceding that i may be incorrect.... SS have confirmed in their forum that they are not considering the option of opening an offshore office. However, please check SS official policy with regard to this - I cannot make claims about the factual accuracy of this information.

Hi Lucy, sorry to see you were silenced at SS Is that permanent?

Yes, I read somewhere that SS won't be setting up off-shore offices. The problem is, if the IRS perceives that a new office was set up to avoid taxation, they will charge SS with tax evasion. Which would probably put SS out of business. If SS had opened an office somewhere else BEFORE all this mess, then it would not have the "appearance" of evading taxes. But it's too late now.


The days of using tax havens is becoming riskier.  Most countries have anti treaty shopping rules written into their tax treaties so they can prosecute and fine companies which try to set up shop in another country to avoid having their payees pay taxes on royalty income. The US in particular is taking strong actions to clamp down on countries which serve as tax havens. 

http://www.law.com/jsp/law/international/LawArticleIntl.jsp?id=1202430980122 (http://www.law.com/jsp/law/international/LawArticleIntl.jsp?id=1202430980122)

Maybe Jon would prefer to stay out of jail, so that we can all continue to make the money we have enjoyed by working with a US company over the years.

I am surprised that most people do not grasp the concept that most industrialized countries have tax treaties and each of those countries has the right to exercise their rights under those treaties to charge tax's on the royalty payments which arise in their country. 

It looks like the time has come for microstock to pay the tax piper.

Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: epixx on June 01, 2009, 00:15
Could it be that most critics of the US withholding tax have never before declared their income to their local fiscal authorities and for the first time realize that microstock is a business and that tax fraud is a crime?

Withholding taxes do exist in a lot of countries and you get back overpaid amounts when filling out your yearly tax declaration.  Why should a honest taxpayer have a problem with that?

I have a problem with paying tax in a country where I don't live. The country that should receive my tax money is the one where I use the hospitals, the roads and other public services.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Phil on June 01, 2009, 02:12
The CEO rant post has been removed.
That´s hilarious :)

Perhaps he was banned  ;D

lol
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: luceluceluce on June 01, 2009, 02:17

It looks like the time has come for microstock to pay the tax piper.

The submitters are being asked to dance in this particular waltz.  

We will have to be paying the piper, which is a bit annoying because i definitely prefer much more contemporary music - although i must say that moroccan flamenco really has some lovely pipes.

Does anyone know the ratio of small submitters in microstock at the moment?  This will primarily affect them.  Ethical reasons aside, the practical costs involved (including the length of time) will deter many from submitting to the US sites.

Will the other US sites follow suit?  Is this just SS - or is the IRS sharpening up its tax clawback claws in general?  Won't ultimately this affect the US stock industry detrimentally?

Will non-US suppliers consider US-based stock sites to be at a competitive disadvantage due to the time-consuming and expensive paperwork involved?  Could this lead to vast drop in US-based sites stock portfolios? - as this the opportunity for non-US sites need to enter the market aggressively?

Could ultimately this IRS measure harm US industry itself? I really don't know - but they're very intriguing questions....

I bet the non-US sites are gonna be making all the hay they can while this particular sun in shining.

I personally, as a supplier, would like to work in partnership with the US sites in order to find solutions that will benefit all.

x



Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: KiwiRob on June 01, 2009, 02:42
I'm actually surprised more people weren't banned.  The level of outrage over something SS has no control over, plus the ensuing misinformation that was being spread, was pretty ridiculous and very unprofessional on the part of some of the contributors.  Thank goodness calmer heads prevailed over here at Microstockgroup where accurate information can be shared. 

SS do have control over it, Jon could move the company offshore like all his competition, then the problem would go away. This issus is probably the reason why the majority of MS agencies aren't located in the US. You have to feel for those who live in non treaty countries, loosing 30% of bugger all really would make one question the worth of joing SS.

From what i gather, and to the best of my knowledge of the information available, and conceding that i may be incorrect.... SS have confirmed in their forum that they are not considering the option of opening an offshore office. However, please check SS official policy with regard to this - I cannot make claims about the factual accuracy of this information.
Hi Lucy, sorry to see you were silenced at SS Is that permanent?

Yes, I read somewhere that SS won't be setting up off-shore offices. The problem is, if the IRS perceives that a new office was set up to avoid taxation, they will charge SS with tax evasion. Which would probably put SS out of business. If SS had opened an office somewhere else BEFORE all this mess, then it would not have the "appearance" of evading taxes. But it's too late now.

That's not smart business, they will probably loose all their non tax treaty submitters, who want's to work for maybe 12-15 cents an image, it wouldn't be tax evasion it would be moving the business offshore like a number of other internet companies have done in recent years for this very reason, he could even shift to Canada and have parties with the boys and girls at IS. SS should have been made aware of this issue when they started up, it's just incompetance on the behalf of their tax advisers that this was missed.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: luceluceluce on June 01, 2009, 02:45
The CEO rant post has been removed.
That´s hilarious :)

Perhaps he was banned  ;D

lol

I reckon it was like a movie.  (i hope i don't get in trouble with the irs for this : )

The staff of shutterstock - eyes dim with exhaustion, now almost too passive to care - confined in a tiny room by the IRS.  There are no windows - and all the staff can see is their tired and broken reflections in the two-way mirror. After 6 weeks, all they want to do is sleep.

Papers are thrown in their faces - questions are shouted - threats are made - the IRS is the LAW; the IRS has the BEST lawyers, the BEST advice, and the POWER to close anyone down and cripple them financially for the rest of their lives.

Maybe they struggled, maybe they did their best... we don't know because they didnt tell us. We don't know what happened before the announcement...

In the beginning i was disappointed with their reaction - but, if the movies are anything to go by,  its understandable if they freaked out by being poked by the big finger of the IRS.  Maybe SS didnt have time to formulate a better policy because the IRS didn't give them time....

There was so much goodwill towards SS before this.  Maybe if we understood more the problems that they have faced, and can convince them we want to work with them and not against them, we can all work it out together.

(this is half naive speculation - maybe the IRS are supersweet so Im sorry if i've been slanderin' the taxman)

Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on June 01, 2009, 04:45
Some misinformation and received opinion about, so called, Tax Havens is being subtly propagated on this thread by various posters. In some cases this seems almost like a sort of imperialism. In so much as it propagates the notion that countries with different tax regimes are somehow dodgy or shady.

Let's be absolutely clear about the facts. Switzerland is not tax haven. The UK is not a tax haven. The Netherlands is not a tax haven. Luxembourg is not a tax haven. Belgium is not a tax haven. Ireland is not a tax haven. I could go on. All of these countries and many others have variously been accused of being tax havens at different times.

The G20 countries have adopted the OECD standard. The OECD publishes lists of nations which do / do not meet international standards of transparency (and exchange of information). The  OECD White List (http://www.oecd.org/dataoecd/38/14/42497950.pdf) details countries which are not tax havens.

All of the nations on that list have been assessed against equivalent standards.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: luceluceluce on June 01, 2009, 05:12
well said alias
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Gizeh on June 01, 2009, 05:41

Let's be absolutely clear about the facts. Switzerland is not a tax haven.

That is debatable. But you should be aware that in Switzerland you have to pay withholding taxes just like in the US. Every foreigner owning some swiss stocks knows this. And compared to the US it is much more difficult and bureaucratic to get this money back.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: hqimages on June 01, 2009, 07:08
Guys you can argue about countries trade laws day and night, fact is, go onto the istock website, read some of their help pages, find the one about tax, or witholding tax, and guess what it says. It says it's up to you to pay income tax to the country you reside in, and outside of that your income is not taxed by their country.

If they can do it, SS can do it. Full stop.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: evan_ers on June 01, 2009, 07:45
Guys you can argue about countries trade laws day and night, fact is, go onto the istock website, read some of their help pages, find the one about tax, or witholding tax, and guess what it says. It says it's up to you to pay income tax to the country you reside in, and outside of that your income is not taxed by their country.

If they can do it, SS can do it. Full stop.
I'm sure there are differences between the requirements of Revenue Canada and the IRS, but I'm not an expert.

And regarding tax havens, when people say "off-shore", I had a feeling they were talking about small Caribbean islands, not Switzerland or Ireland. But maybe I'm wrong about that.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on June 01, 2009, 07:59
And regarding tax havens, when people say "off-shore", I had a feeling they were talking about small Caribbean islands, not Switzerland or Ireland. But maybe I'm wrong about that.

But there you are in danger effectively calling the Caribbean states, as a whole, tax havens. As if that was to almost imply a sort of shady criminality. Where as what you could do is follow the link to the OECD information which I posted above and actually get some solid information. The fact is that there are now very few nations which the OECD and the G20 (including Australia, the EU countries and the USA) actually considers to be tax havens. The term is almost redundant.

This term is actually normally used by one nation to make glib innuendo about another nation - normally for political reasons. So, for example, for a while various of the EU countries used to called London and Ireland tax havens. Now the Netherlands is often criticized. Often it is just about countries having more effective systems of generating income - or putting the emphasis on creating tax environments which promote business and therefore jobs.

It is a relative term. The US, for example, has a federal system. Should a company which moves to a lower tax state within the US be accused of tax evasion? Or an EU company which moves from France to the Netherlands?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: bittersweet on June 01, 2009, 08:34
I have a problem with paying tax in a country where I don't live. The country that should receive my tax money is the one where I use the hospitals, the roads and other public services.

It could be argued that the income is generated from a US company utilizing US resources. Also, it seems laws like this are designed to give the impression that the US gov't is doing something to slow the tide of "US jobs going to foreigners" and check off their "promise kept" box, while in reality 'microstock photographer' isn't going to be one of the US jobs that would be supporting a middle-American family so it does more harm than good.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: hqimages on June 01, 2009, 09:03
I have a problem with paying tax in a country where I don't live. The country that should receive my tax money is the one where I use the hospitals, the roads and other public services.

It could be argued that the income is generated from a US company utilizing US resources. Also, it seems laws like this are designed to give the impression that the US gov't is doing something to slow the tide of "US jobs going to foreigners" and check off their "promise kept" box, while in reality 'microstock photographer' isn't going to be one of the US jobs that would be supporting a middle-American family so it does more harm than good.

The income is generated by a company utilizing US resources that ALREADY pays tax on it's profits.. let's not forget that, SS still have to pay US revenue their own income tax!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: fullvalue on June 01, 2009, 09:12
Please forgive me if this has been covered but I read the first 6 or so pages and then skipped to the end.

1.  Why is SS doing this but other US based agencies aren't?  If you're going to collect money are you going to start with the account that owes you a million or the one that owes you 10,000?  Tax agencies aways go after the biggest fish first.

2.  I've seen mention of a phone number for the IRS but no mention of their website.  http://www.irs.gov (http://www.irs.gov)  http://www.irs.gov/taxtopics/tc857.html  (http://www.irs.gov/taxtopics/tc857.html)  Noticed that there was a new publication on this subject dated 5/17/2009.  Timing might have something to do with this.

3.  You might want to read the guidelines yourself or contact one of the IRS international offices.  http://www.irs.gov/localcontacts/article/0,,id=101292,00.html (http://www.irs.gov/localcontacts/article/0,,id=101292,00.html)

I'm not a big Obama supporter and I thought it rather silly that he was appointing an Internet Czar but it they address issues like this then it might be a good thing.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: gbalex on June 01, 2009, 12:52
Some misinformation and received opinion about, so called, Tax Havens is being subtly propagated on this thread by various posters. In some cases this seems almost like a sort of imperialism. In so much as it propagates the notion that countries with different tax regimes are somehow dodgy or shady.

Let's be absolutely clear about the facts. Switzerland is not tax haven. The UK is not a tax haven. The Netherlands is not a tax haven. Luxembourg is not a tax haven. Belgium is not a tax haven. Ireland is not a tax haven. I could go on. All of these countries and many others have variously been accused of being tax havens at different times.

The G20 countries have adopted the OECD standard. The OECD publishes lists of nations which do / do not meet international standards of transparency (and exchange of information). The  OECD White List ([url]http://www.oecd.org/dataoecd/38/14/42497950.pdf[/url]) details countries which are not tax havens.

All of the nations on that list have been assessed against equivalent standards.


Recent developments at the G20

http://www.telegraph.co.uk/finance/financetopics/g20-summit/5090593/G20-summit-Sun-setting-on-tax-havens.html (http://www.telegraph.co.uk/finance/financetopics/g20-summit/5090593/G20-summit-Sun-setting-on-tax-havens.html)

"“More progress has been achieved in the fight against tax havens in the last few weeks than over the past decade,” OECD Secretary-General Angel Gurría said this week, adding that the economy should take the credit. “At a time when governments need every tax dollar legally due to combat the world recession, such practices can no longer be tolerated.”

Under mounting pressure, offending countries are finally being pulled into line. Six months ago, according to the OECD, 46 countries had no bilateral tax information exchange agreements – in other words complete banking secrecy. Now, there are only about 15. This “blacklist” has been given to the G20, which may name and shame the offenders on Thursday.

Switzerland may be on the list but, in a historic move last month, it promised to co-operate with countries investigating tax evasion. “Banking secrecy does not protect any form of tax offence,” the Swiss government said in an attempt to marry its historic banking principles with the climbdown.

Switzerland, Monaco, Jersey, Guernsey, the British Virgin Isles, the Cayman Islands, Belgium, Luxembourg, Hong Kong, Singapore, and all the many offshore centres that have recently signed bilateral agreements are not doing so out of a sense of public spirit. “Victim” countries are fighting back.

According to Jeffrey Owens, director of the OECD’s centre for tax policy, countries are taking “defensive measures to protect their tax base”, which include the threat of rescinding existing treaties and denying the deductability of interest payments to non-co-operative jurisdictions. For countries like Singapore, which has 50 tax treaties with OECD countries, banking secrecy would be very expensive.

Stefan Jaecklin, a partner at Oliver Wyman, says: “There is a realisation that retaliation can go beyond the financial sector. As countries are more globalised now, there are areas where their economies are open to retaliation.”

Enforcement will be key. Seven years ago, 35 countries – including Switzerland – made a “commitment to implement the OECD’s standards of transparency and exchange of information”. “A lot of them did not act on their words,” a spokesman said. “G20 countries are now saying, 'Enough is enough – you made the commitment and now you have to live up to it’.” "
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on June 01, 2009, 13:52
Nice post. It is definitely all very positive and the whole issue is finally being put to rest. It's tremendously positive for emerging countries especially, I suspect, on the African continent.

The net effect of the standardization of economic accountability, may very well be that it encourages completely open tax competitiveness between nations. The OECD and the G20 have put in place a regime under which countries can openly compete to provide business friendly tax low tax environments without now being accused of being somehow shady.

The OECD white list and G20 recognition of the OECD standards have made the competitive tax jurisdictions respectable. On one hand it means and end to the old fashioned so called tax havens. On the other it means that they are now legit.

The OECD and the G20 (including the US) have recognized, finally, that there is actually nothing inherently wrong with tax competition. In the internet age that makes a lot of sense and is hugely positive for world economic growth.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Suljo on June 01, 2009, 14:04
After all I feel my head will explode...

Let say stupid pharse "world is changing etc..." similar things but as I see in bad way...
Treaty or not treaty contributors are in the same trouble with costly SINECURE paperwork provided by IRS and that is the MAYOR problem.

Like seen in NationalGeogrphy documetary about sharks, Photographer and videographer are dropped down from the ship in cage and feed sharks "with they own smell or some bloody part of other annimals" to present easy bait for sharks.
For me next scene. Stupid sharks are try to chew CAGE because of smell and dont realize in their heads "How is something smelling so good and its not edible??? But as I seen from thousands of post that all of the crew in the cage is in danger because too many bars of cage is missing an shark will get from someone finger, and from someone hand anyway.
As I try to realize IRS has not intention or any efforts to make things simple.
Ccccc only 4 offices for all Europe for certifying documents + long and priggish reviewing process (like some micros).
They just want money anyhow.

My suggestion to IRS
Close all offices around the globe and open only one of the north or south pole and you will spare more money form tax payers for renting offices.
And make new rule that every tax payer must come to you new office on the knees and moan and beg you.
Also make rule that tax payers must ask for that every month,
and normally why to be so modest, rise prices and taxes even more than 2x...  >:(
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: gbalex on June 01, 2009, 14:10
Nice post. It is definitely all very positive and the whole issue is finally being put to rest. It's tremendously positive for emerging countries especially, I suspect, on the African continent.

The net effect of the standardization of economic accountability, may very well be that it encourages completely open tax competitiveness between nations. The OECD and the G20 have put in place a regime under which countries can openly compete to provide business friendly tax low tax environments without now being accused of being somehow shady.

The OECD white list and G20 recognition of the OECD standards have made the competitive tax jurisdictions respectable. On one hand it means and end to the old fashioned so called tax havens. On the other it means that they are now legit.

The OECD and the G20 (including the US) have recognized, finally, that there is actually nothing inherently wrong with tax competition. In the internet age that makes a lot of sense and is hugely positive for world economic growth.


Re: On the other it means that they are now legit.

I would use the word "accountable" rather than "legit".  The recent moves makes it much harder for companies who set up shell companies in various countries around the world to evade tax obligations.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on June 01, 2009, 14:20
The recent moves makes it much harder for companies who set up shell companies in various countries around the world to evade tax obligations.

For sure. But the main issue is that a company can now set up in any country which is on the OECD white list without some vested interest trying to insinuate that the country involved is somehow dodgy. Because all of the countries on the OECD white list have equal status. So countries can now much more fairly compete to provide good business environments. Which is a very positive result.

Seriously - who wouldn't move the business somewhere less bureaucratic ?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: KiwiRob on June 01, 2009, 15:35

I'm sure there are differences between the requirements of Revenue Canada and the IRS, but I'm not an expert.

And regarding tax havens, when people say "off-shore", I had a feeling they were talking about small Caribbean islands, not Switzerland or Ireland. But maybe I'm wrong about that.
[/quote]

I was thinking anywhere other than in the US, Canada is probably a good choice, as people have said IS doesn't have this problem, they are in Canada, Canada is probably a nicer place to live than the US, Jon might be happier there and less prone to emotional outbursts. ;D
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Freedom on June 01, 2009, 15:40
Perhaps you guys can write to IRS or a US accountant to ask if foreigner freelance photographers should be subject to the US withholding tax. If the answer is no, then send it to SS.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: evan_ers on June 01, 2009, 15:44
I'm sure there are differences between the requirements of Revenue Canada and the IRS, but I'm not an expert.

And regarding tax havens, when people say "off-shore", I had a feeling they were talking about small Caribbean islands, not Switzerland or Ireland. But maybe I'm wrong about that.

I was thinking anywhere other than in the US, Canada is probably a good choice, as people have said IS doesn't have this problem, they are in Canada, Canada is probably a nicer place to live than the US, Jon might be happier there and less prone to emotional outbursts. ;D

Hah! You're probably right that the laid-back Canadian West could help prevent emotional outbursts! (IS is out west somewhere, am I right?) Certainly would be healthier than NYC!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: gbalex on June 01, 2009, 15:51
The recent moves makes it much harder for companies who set up shell companies in various countries around the world to evade tax obligations.

For sure. But the main issue is that a company can now set up in any country which is on the OECD white list without some vested interest trying to insinuate that the country involved is somehow dodgy. Because all of the countries on the OECD white list have equal status. So countries can now much more fairly compete to provide good business environments. Which is a very positive result.

Seriously - who wouldn't move the business somewhere less bureaucratic ?

Do you know of any country which does not include Article XII in the most recent version of its tax treaty?  The issue at hand is that as internet business revenue expands and global tax bases continue to shrink, most countries are starting to become much more aggressive in enforcing and collecting tax's under their existing treaties. 

Royalties

1.  Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

If you know of a country that does not include royalty considerations in their agreements with the countries who participate with them could you post those tax treaties?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: luceluceluce on June 01, 2009, 16:34
So, I sat down for a long time with my thumb and a pencil.  (I didn't really need the pencil because I used the calculator on my laptop)

If every country were to automatically withhold tax on royalties (like the US is doing), unless supplied with a notarised and apostilled copy of a passport and a tax number application form -  then the rough figure (worked out on my confabulator) to enter into the microstock market is $11,000.

Were such a thing to occur, i shall personally start shooting porn.
x
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: sharpshot on June 01, 2009, 16:43
It looks we will be able to use an EIN number, if it is appropriate.  This is the thread that an admin has replied to.
http://submit.shutterstock.com/forum/viewtopic.php?t=62691 (http://submit.shutterstock.com/forum/viewtopic.php?t=62691)

The weather here has been too nice to read through all the details but does anyone know if there are any drawbacks doing this?  I want to keep it as simple as possible, doing my tax in the UK is all I can cope with, I should get an accountant but I like doing it myself.  Don't think I could cope with having to do a US tax return as well though.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Milinz on June 01, 2009, 16:51
;-)

http://www.cato-at-liberty.org/2009/05/25/obamas-proposed-irs-rules-mean-trouble-for-overseas-americans-will-also-lead-to-less-investment-in-america/ (http://www.cato-at-liberty.org/2009/05/25/obamas-proposed-irs-rules-mean-trouble-for-overseas-americans-will-also-lead-to-less-investment-in-america/)
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on June 01, 2009, 16:56
1.  Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

Might be worth you quoting article 12 in full. It raises some fascinating issues. You have obviously looked into this much more than me.

It practically deserves its own thread.

:)
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: snaprender on June 01, 2009, 17:03
It looks we will be able to use an EIN number, if it is appropriate.  This is the thread that an admin has replied to.
[url]http://submit.shutterstock.com/forum/viewtopic.php?t=62691[/url] ([url]http://submit.shutterstock.com/forum/viewtopic.php?t=62691[/url])

The weather here has been too nice to read through all the details but does anyone know if there are any drawbacks doing this?  I want to keep it as simple as possible, doing my tax in the UK is all I can cope with, I should get an accountant but I like doing it myself.  Don't think I could cope with having to do a US tax return as well though.


From what I was reading, if you supply an EIN instead of at ITIN, you will need to do a US tax return every year for the IRS (Due not later than April 15th). 
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: RT on June 01, 2009, 17:22
From what I was reading, if you supply an EIN instead of at ITIN, you will need to do a US tax return every year for the IRS (Due not later than April 15th). 

Only if your business is in the US.

If your business is outside of the US you do not have to supply them with any annual tax return because your accounts are nothing to do with the US, that's the whole point of completing a W-8BEN
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: luceluceluce on June 01, 2009, 17:24
Congratulations!

* has approved and selected your photo 14424300. The image is now available for sale.

Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Milinz on June 01, 2009, 17:28
Congratulations!

* has approved and selected your photo 14424300. The image is now available for sale.




* = Fotolia ;-)

http://www.fotolia.com/id/14424300 (http://www.fotolia.com/id/14424300)

But, Liceluceluce, stay away from fotolia forum - they ban for even less than you said on SS. I am banned 2 years!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: luceluceluce on June 02, 2009, 00:54
Milinz - ur a submersive elephant too?

I really have to stop confusing corporate entities with egalitarian collectives....
: D
x
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: luceluceluce on June 02, 2009, 01:15
What is it with microstock?  I keep reading about past protests on other agencies too (on different issues).

I think they should take the forums away from us.  It can get confusing.. are we a community or just suppliers? Is this just a cold business or do some agencies use submitter loyalty in their branding?

Can we all have our cake, and eat it too?

What do the agencies want?  Submitters or suppliers?  A community or 'international business'?  If we are a community we are likely to react in emotional ways, if we are 'business people' we are likely to act in cold and pragmatic ways.

For so many this industry was about 'passion'.  Now we are told it is only about 'business'.

Well, the business response is this: avoid distrubution channels that make it difficult to distribute. Diversify our portfolios - and non-US submitters focus on sites that don't attract IRS issues.

Im sad I've gone all cold and hard and glinty.  i enjoyed the idea of being part of a community - all in it together, all helping each other along.  Before i used to include the agency in this warm glowy fireside picture.... and that is what has really changed for me (although my glowy feelings about you guys are stronger than ever!)

Now I am ready for international business. I have lost my naivety.  Before I had this idea that I was a child, who was being done a favour by an agency... and that this agency protected me and my interests.

Im not a child. They are not a parent. Forums are not free - they are part of a corporate branding strategy.

We are not submitters. We are not contributers. This devalues us as international business people.

We are suppliers.

I'm so relieved that I have that all straightened in my head
x

ps. any agency out there who runs this more in partnership with your photographers?  Put me on your list pls.  I actually don't want to be cold and hard... I want to work WITH others because this is how i want the world to be....


Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Maui on June 02, 2009, 01:49
From what I was reading, if you supply an EIN instead of at ITIN, you will need to do a US tax return every year for the IRS (Due not later than April 15th). 

Only if your business is in the US.

If your business is outside of the US you do not have to supply them with any annual tax return because your accounts are nothing to do with the US, that's the whole point of completing a W-8BEN

Do you have a link for this? I remember reading about it somewhere, but I can't find it anymore.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: luceluceluce on June 02, 2009, 01:55
Quote
  I guess I would try to understand Serbia's Tax laws before I did business there.  As anyone should have done before doing business with a US company.  You are responsible for yourself. Ignorance of the laws is not an excuse.

You do do business in serbia. You do do business in the UK.  Stock sites have international customers.

The difference is that these countries are not requiring you to apply for their tax number via a long, costly and difficult process.

If anybody  makes this point again.... please can you also quote the Japanese, German, Russian, British, Latvian tax numbers you have applied for to prevent them automatically withholding 30% of your earnings.

Or it is only the IRS who is not keeping to the spirit of the exisiting treaties?
x
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: luceluceluce on June 02, 2009, 02:07
Russians! hi!

I guess you guys are talking about all this on russian forums.  Can any of you give us an update on what the consensus is on the Russian forums?

Chinese! Hi!
I guess you guys are talking about all this on Chinese forums.  Can any of you give us an update on what the consensus is on the Chinese forums?

Japanese! Hi!
I guess you guys are talking about all this on Japanese forums.  Can any of you give us an update on what the consensus is on the japanese forums?

Other nationalities too:
It would be really great to get your perspective because it's mostly native english speakers here so it could give an inaccurate picture...  what is the consensus on your forums?

Lucy x
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: luceluceluce on June 02, 2009, 02:33
It is now possible to buy olive oil easily in supermarkets in India. It is now possible to get a phone without a 3 year wait. It is now possible to buy solar panels.

more more more more more more more more.

But not before.  Why? Because the Indian government made it difficult to do business in india.

Then they deregulated. They are the largest democracy in the world, and now have a middle class in the hundreds of millions.... and growing.

You will not have to apply for an Indian tax number.  You will not see India applying automatic withholding.  They understand the lessons of the past and are looking to benefit from international business.

The bottom line is surely is: You put up obstacles to conducting business, you lose business

These double taxation treaties were introduced to deal with a world of international business. If the US is using the letter of the treaties to clawback the tax... how long does it expect other countries merely to obey the spirit? 

if we don't call attention to this issue now: then maybe soon it will not be a joke... and we will need to apply for multiple tax numbers to avoid double taxation. Imagine the paperwork then : (

x
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Milinz on June 02, 2009, 05:33
@ alpy7
Quote
I guess I would try to understand Serbia's Tax laws before I did business there.  As anyone should have done before doing business with a US company.  You are responsible for yourself. Ignorance of the laws is not an excuse.

You obviously don't know what you are talking about!

If I knew that I will pay my tax to USA Government instead of my country government I'd better make my strategy on what to sell where.

There is Alamy for example where anyone can sell with not needed to pay such 30% non-treaty tax because UK as traditional and respected country in the world have signed such treaty with almost any country on this planet.

So, Tax from USA IRS comes AFTER a Years of building portfolio. It was NOT NOTED IN CONTRIBUTORS AGREEMENT THAT USA WITHHELD 30% TAX from Non-treaty contributors.

There is it and I PAY MY TAXES TO MY COUNTRY.

Nevertheless your talking about Law brings to my mind that USA BOMBS have killed many kids and other civilians in my country. So, There is no way I can be happy to pay ANY TAX to US GOVERNMENT!

[EDIT] Just to add: Any agency should have clear agreement with authors. There should be all writen in that agreement so not any problem rises between parties. Here we have pure example of badly writen agreement and turning authors to something they wasn't aware of! After all Agent is called agent because AGENT TAKES CARE ALL TO BE IN ORDER TO SATISFY AUTHOR AND CUSTOMER AND WITH STRICT COMPLY TO LAWS!

I am CEO in an agency. I know how it is to be run!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: RT on June 02, 2009, 06:09
I am CEO in an agency. I know how it is to be run!

If you are you should have a better understanding of international business procedures then. Or doesn't your agency sell through one of the biggest markets in the world.

Like it or not, moaning and whinging like a child will not escape the obvious solution which is to fill out the forms, comply with the tax laws in your country and any countries you do business in, this US tax law is not new, it's not unique to the stock industry and it's not Shutterstocks or any other agencies fault that your country and the US do not have the same treaty as others, either accept and deal with it or find another business.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: StockManiac on June 02, 2009, 06:59
I find it very interesting how the only people whining like babies about this are the people with extremely small portfolios.  And if I was Jon, I would remove your portfolios in a second.

I don't see any of the large portfolios complaining about this.  And they have the most to lose financially from this.  Why is that?  Where is the complaining from the top portfolios in the world (Mr. Arcurs, or Ms. Pargeter, or Andresr, etc. etc.)?  They stand to lose large sums of money from all of this.  Yet are they moaning about this on the forums?

This topic seems to have become an issue about U.S. politics (and should probably be moved as such to the ranting forums).  Well, let me tell you what the U.S. has done for most of you.  We have saved your butts from two World Wars.  Most of you would be living under a flag from Nazi Germany or the Land of the Rising Sun if it wasn't for the U.S.

You bitch and moan about the U.S. all the time, yet they are the ones that "keep the peace" around the world.  They could have conquered the world ten times over already, yet they are content with their small slice of the world over the pond.

Many of you complain about double taxation, yet many of your counties use a VAT system, which is the epitome of double (and triple and quadruple) taxation.

Why don't you people just get a life!

Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Eco on June 02, 2009, 07:32
Interesting to note that most of the persons that defends SS has failed to mention that the "childish and amateurish ranting" of non-US photographers has already lead to the admission of SS of two important "mistakes" in their initial message about the tax issue. One being the issue of the validity of the letter that they send to members to attach to form W-7, and secondly the admittance that the 30% withholding only applies to income from sales to US customers. Furthermore, it seems that SS is now considering several other (important) questions that is not yet answered/clarified.

Imagine everyone just accepting the original SS notice and proceeded with the instructions as originally given.  While it is unfair to blame SS for complience to the US tax laws it is clear that they did not do their homework adequetly before dropping this bomb on their loyal submitters.  In the end this breach of confidence can only harm SS.  

I also find it difficult to accept that SS and many fellow photographers can be so insensitive and unsympathetic to those photographers in non-treaty countries that will lose 30% of their SS income (and still pay taxes on the remaining income in their own countries). Microstock is already paying pittance and to lose 30% of your income due to irrational laws is a shame.  If and when stock sites accept co-responibility for this mess you can be assured it will only come as a results of pressure from the "childish and amateurish ranting" of those that care to speak out.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: hqimages on June 02, 2009, 07:56
The reason people with small portfolios are most vocal, is because it will cost them their yearly salary just to process the papers for this thing.. then they potentially lose 30% in America before losing more in their own country, so it's not viable for small contributors to actually go through with this..
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Suljo on June 02, 2009, 08:10
I find this on Panthermedia so maybe something similar exist in US tax laws  ;)

Income when you do not have a registered (small) business

As long as you are not pursuing long-term profit-making activity with your photography, you do not need to register as a business with the relevant authorities. The tax authorities recognize the earnings as "hobby". Under German fiscal law, a hobby is an activity that is conducted without any intentions of making taxable income. Any income that is made out of this activity is not taxable, and any losses incurred also cannot be claimed as deductions.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Dark_Angel on June 02, 2009, 08:20
I find it very interesting how the only people whining like babies about this are the people with extremely small portfolios.  And if I was Jon, I would remove your portfolios in a second.

I don't see any of the large portfolios complaining about this.  And they have the most to lose financially from this.  Why is that?  Where is the complaining from the top portfolios in the world (Mr. Arcurs, or Ms. Pargeter, or Andresr, etc. etc.)?  They stand to lose large sums of money from all of this.  Yet are they moaning about this on the forums?

This topic seems to have become an issue about U.S. politics (and should probably be moved as such to the ranting forums).  Well, let me tell you what the U.S. has done for most of you.  We have saved your butts from two World Wars.  Most of you would be living under a flag from Nazi Germany or the Land of the Rising Sun if it wasn't for the U.S.

You bitch and moan about the U.S. all the time, yet they are the ones that "keep the peace" around the world.  They could have conquered the world ten times over already, yet they are content with their small slice of the world over the pond.

Many of you complain about double taxation, yet many of your counties use a VAT system, which is the epitome of double (and triple and quadruple) taxation.

Why don't you people just get a life!


did you understand this is not about war, but about taxes? ;)

And it does not surprise me at all that it harms small contributors the most! When you make 30 dollar per month since you do this as hobby and then have to decide whether to spend a few hundred Dollars to get an ITIN or accept losing 30% of those 30 dollar per month. What would you do?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: bittersweet on June 02, 2009, 08:45
I find this on Panthermedia so maybe something similar exist in US tax laws  ;)

Income when you do not have a registered (small) business

As long as you are not pursuing long-term profit-making activity with your photography, you do not need to register as a business with the relevant authorities. The tax authorities recognize the earnings as "hobby". Under German fiscal law, a hobby is an activity that is conducted without any intentions of making taxable income. Any income that is made out of this activity is not taxable, and any losses incurred also cannot be claimed as deductions.


In the US, if you want to be able to deduct your expenses, your "hobby" can only operate as a loss for a limited time (I think it used to be 3 years, but I'm not sure what it is now.). If you don't report any income, then you can't deduct any expenses.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Milinz on June 02, 2009, 08:47
I am CEO in an agency. I know how it is to be run!

If you are you should have a better understanding of international business procedures then. Or doesn't your agency sell through one of the biggest markets in the world.

Like it or not, moaning and whinging like a child will not escape the obvious solution which is to fill out the forms, comply with the tax laws in your country and any countries you do business in, this US tax law is not new, it's not unique to the stock industry and it's not Shutterstocks or any other agencies fault that your country and the US do not have the same treaty as others, either accept and deal with it or find another business.

You are talking rubbish... It doesn't have anything to do with international business handling. ALL INTERNATIONAL BUSINESSES have OFFICES AND ARE FUNCTIONING ON TAX AVOIDANCE PRINCIPLES TO BE COMPETITIVE!

IF you think that is something differently then you are making very big mistake!

One thing is to buy camera and take photos... Completely other is to run some business when you need to think how to make enough job for all your employees as well to keep your business live on todays crazy market and even craziest taxing in some countries!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Dook on June 02, 2009, 08:48
(Quote from: StockManiac :
I don't see any of the large portfolios complaining about this.  And they have the most to lose financially from this.  Why is that?  Where is the complaining from the top portfolios in the world (Mr. Arcurs, or Ms. Pargeter, or Andresr, etc. etc.)?  They stand to lose large sums of money from all of this.  Yet are they moaning about this on the forums?)

What are you talking about? These guys are not going to lose their money. They do not come from non-treaty countries. One of their emplyees will do the paperwork and that is it. Why would they complain.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Milinz on June 02, 2009, 08:49
I find it very interesting how the only people whining like babies about this are the people with extremely small portfolios.  And if I was Jon, I would remove your portfolios in a second.

I don't see any of the large portfolios complaining about this.  And they have the most to lose financially from this.  Why is that?  Where is the complaining from the top portfolios in the world (Mr. Arcurs, or Ms. Pargeter, or Andresr, etc. etc.)?  They stand to lose large sums of money from all of this.  Yet are they moaning about this on the forums?

This topic seems to have become an issue about U.S. politics (and should probably be moved as such to the ranting forums).  Well, let me tell you what the U.S. has done for most of you.  We have saved your butts from two World Wars.  Most of you would be living under a flag from Nazi Germany or the Land of the Rising Sun if it wasn't for the U.S.

You bitch and moan about the U.S. all the time, yet they are the ones that "keep the peace" around the world.  They could have conquered the world ten times over already, yet they are content with their small slice of the world over the pond.

Many of you complain about double taxation, yet many of your counties use a VAT system, which is the epitome of double (and triple and quadruple) taxation.

Why don't you people just get a life!



Stop talking stupid things and go learn some economy!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Milinz on June 02, 2009, 08:53
I find this on Panthermedia so maybe something similar exist in US tax laws  ;)

Income when you do not have a registered (small) business

As long as you are not pursuing long-term profit-making activity with your photography, you do not need to register as a business with the relevant authorities. The tax authorities recognize the earnings as "hobby". Under German fiscal law, a hobby is an activity that is conducted without any intentions of making taxable income. Any income that is made out of this activity is not taxable, and any losses incurred also cannot be claimed as deductions.


At least some reasonable sentences!
It makes some reasonable and logical explanations!

Big ones (as Yuri and Andersr) have no problems with that... It is all about most of contributors who 'upload their images just to earn some money and not to leave their images collect dust on HDD'...
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Noodles on June 02, 2009, 08:53
It is now possible to buy olive oil easily in supermarkets in India. It is now possible to get a phone without a 3 year wait. It is now possible to buy solar panels.

more more more more more more more more.

But not before.  Why? Because the Indian government made it difficult to do business in india.

Then they deregulated. They are the largest democracy in the world, and now have a middle class in the hundreds of millions.... and growing.

You mean you can't sell your old cheap jeans for 100 bucks anymore when u land in India????  *!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Noodles on June 02, 2009, 09:02
Well, let me tell you what the U.S. has done for most of you.  We have saved your butts from two World Wars.  Most of you would be living under a flag from Nazi Germany or the Land of the Rising Sun if it wasn't for the U.S.

Hey, you guys sat and watched for a very long time while Britain did its best to fight the Nazi's - I don't recall Britain sitting and watching when the Iraq and Afgan issues started. We stood behind you from the very beginning. Its called "doing the right thing". Same applies to taxes buddy!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Milinz on June 02, 2009, 09:14
Well, let me tell you what the U.S. has done for most of you.  We have saved your butts from two World Wars.  Most of you would be living under a flag from Nazi Germany or the Land of the Rising Sun if it wasn't for the U.S.

Hey, you guys sat and watched for a very long time while Britain did its best to fight the Nazi's alone - I don't recall Britain sitting and watching when the Iraq and Afgan issues started. We stood behind you from the very beginning. Its called "doing the right thing". Same applies to taxes buddy!

VAT - is soon to be introduced and collected in USA too... Just wait and see!

Yes UK is OK country if you ask me. If shutterstock is UK company my tax would be 10% as it is for Yuri in USA and that is OK.
Also, UK recognized all signed treaties  with ex Yugoslavia (so that 10% is valid for all: Croatia, Bosnia, Makedonia, Serbia, Montenegro, Slovenia (which is exception now with 5% due to it is part of EU). Even Argentina and many other countries have signed that treaty with UK and USA always made some IFs and made impossible to sign treaty. Also, USA never wanted to sign any treaty with any socialist country.
So this IS POLITICAL TAX. Especially when USA playing big brother on any other country in the world which dont comply to their foreign policy and expectations in order how some country should behave to comply to USA interests.

BTW, I again say that I am not against any American - Just against political protectivism which US Governmet is making.

Also what I expect from Americans is to understand that we all pay our taxes in our countries!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: RT on June 02, 2009, 09:17
You are talking rubbish... It doesn't have anything to do with international business handling. ALL INTERNATIONAL BUSINESSES have OFFICES AND ARE FUNCTIONING ON TAX AVOIDANCE PRINCIPLES TO BE COMPETITIVE!

You make me laugh, you claim to be a CEO of an agency and yet you didn't know about the US tax laws and think it has nothing to do with international business  :D
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Milinz on June 02, 2009, 09:28
You are talking rubbish... It doesn't have anything to do with international business handling. ALL INTERNATIONAL BUSINESSES have OFFICES AND ARE FUNCTIONING ON TAX AVOIDANCE PRINCIPLES TO BE COMPETITIVE!

You make me laugh, you claim to be a CEO of an agency and yet you didn't know about the US tax laws and think it has nothing to do with international business  :D

Sorry dude your non-knowing things comes to level where I must say you are talking stupid. IF JON KNEW for that HOW TO RUN INTERNATIONAL COMPANY he'd made that this issue about tax never come up!

IF I am CEO on Shutterstock I'd make some Shutterstock company on Cayman Islands or in Ireland and handle things as any other serious company handling things about taxes.

My company don't do business with USA because we are more with EU and Asian markets which bring us less harrasment to complete business!

And YES - US TAX doesn't have not single influence in running international business!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: RT on June 02, 2009, 09:43
Sorry dude your non-knowing things comes to level where I must say you are talking stupid.

You call me stupid!!! - you've made numerous posts that display a complete lack of understanding in business practices, you claim to run an agency and yet you still haven't worked out how to avoid this US tax even if you live in a country without a treaty, something that any businessman would be able to work out in under five minutes.

Oh and by the way if you knew anything about business you'd realise that opening an office in the Cayman Islands is probably the worse thing Jon from Shutterstock could do right now, Obama has made a point of targeting the US companies based there because of the very reason you think SS should open an office.

Oh and the reason that other companies have overseas offices is nothing to do with protecting people like you from the 'US witholding tax' law, do you really think all these companies run an overseas office just so you can avoid paying witholding tax, no they do it so that they can avoid paying tax.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: helix7 on June 02, 2009, 09:50
Hi guys. I've been skimming this thread (it's a lengthy one) and there's something I don't quite understand. As far as I can tell this 30% tax only applies if you don't file the proper paperwork, is that right? And I do understand that filing such paperwork can be a hassle, but it also sounds like it can be done via mail to the IRS. Is that right?

If that is true, then why is this such a big deal? I know I won't win any popularity contests with that sort of question in this thread, but really I'm just trying to get my head around this issue. The amount of fury and anger directed at SS for this new policy would make it seem as though this 30% tax was unavoidable, yet from what I'm reading it sounds like it's just a matter of doing a little paperwork to get around it.

What am I missing here?


Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Milinz on June 02, 2009, 09:53
Hi guys. I've been skimming this thread (it's a lengthy one) and there's something I don't quite understand. As far as I can tell this 30% tax only applies if you don't file the proper paperwork, is that right? And I do understand that filing such paperwork can be a hassle, but it also sounds like it can be done via mail to the IRS. Is that right?

If that is true, then why is this such a big deal? I know I won't win any popularity contests with that sort of question in this thread, but really I'm just trying to get my head around this issue. The amount of fury and anger directed at SS for this new policy would make it seem as though this 30% tax was unavoidable, yet from what I'm reading it sounds like it's just a matter of doing a little paperwork to get around it.

What am I missing here?


You are missing a detail: Non-treaty contributors can't have that papers done - and that is the main problem.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: helix7 on June 02, 2009, 10:01
You are missing a detail: Non-treaty contributors can't have that papers done - and that is the main problem.

I see. Thanks.

Anyone know roughly how many countries can't file the paperwork? Does this affect a large portion of non-U.S. Shutterstock contributors?


Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Milinz on June 02, 2009, 10:04
Sorry dude your non-knowing things comes to level where I must say you are talking stupid.

You call me stupid!!! - you've made numerous posts that display a complete lack of understanding in business practices, you claim to run an agency and yet you still haven't worked out how to avoid this US tax even if you live in a country without a treaty, something that any businessman would be able to work out in under five minutes.

Oh and by the way if you knew anything about business you'd realise that opening an office in the Cayman Islands is probably the worse thing Jon from Shutterstock could do right now, Obama has made a point of targeting the US companies based there because of the very reason you think SS should open an office.

Oh and the reason that other companies have overseas offices is nothing to do with protecting people like you from the 'US witholding tax' law, do you really think all these companies run an overseas office just so you can avoid paying witholding tax, no they do it so that they can avoid paying tax.

No I called your talking stupid due it is.
Business practices in USA are completely different than in other parts of this planet. So, you may know something about USA business... But, you don't know all. And me too can not know all.
Well, Jon may register his new company under some other name and call it BLABLA if he wants. It is nothing matter if it is called shutterstock or BLABLA... The point is that HE can make it easier for him and his foreign contribbutors. I won't give you full recipe because it is not free of charge!

Also, That BLABLA company can be main source for images of foreign contributors and also that BLABLA company can sell its photobank images through Shutterstock LLC... And, as affiliate company with signed contract there is no so high TAX for that company if you understand me!

So yes... There will stay more money for Shutterstock, less harrasments with papers as well more money for foreign contributors. What is wrong with that? It is perfectly legal and possible to do. That is how ALL international businesses operate. So you have more reasons than that one with only THEIR interest in having OFFSHORE base company!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Milinz on June 02, 2009, 10:06
You are missing a detail: Non-treaty contributors can't have that papers done - and that is the main problem.

I see. Thanks.

Anyone know roughly how many countries can't file the paperwork? Does this affect a large portion of non-U.S. Shutterstock contributors?



It is about or over 100 countries with which USA don't have such treaty signed!
In some percentage it may be statistically about 50% of shutterstock photobank!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: helix7 on June 02, 2009, 10:16

It is about or over 100 countries with which USA don't have such treaty signed!
In some percentage it may be statistically about 50% of shutterstock photobank!


I had a feeling it would be at least that many. Thanks for the info.


Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: nicemonkey on June 02, 2009, 10:23
I am set up as a limited company so as such I am employed by my company do I still apply for a ITIN number with a W-7 form? or do I have to use another form?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: RT on June 02, 2009, 10:24
No I called your talking stupid due it is.
Business practices in USA are completely different than in other parts of this planet. So, you may know something about USA business... But, you don't know all. And me too can not know all.
Well, Jon may register his new company under some other name and call it BLABLA if he wants. It is nothing matter if it is called shutterstock or BLABLA... The point is that HE can make it easier for him and his foreign contribbutors. I won't give you full recipe because it is not free of charge!

Also, That BLABLA company can be main source for images of foreign contributors and also that BLABLA company can sell its photobank images through Shutterstock LLC... And, as affiliate company with signed contract there is no so high TAX for that company if you understand me!

So yes... There will stay more money for Shutterstock, less harrasments with papers as well more money for foreign contributors. What is wrong with that? It is perfectly legal and possible to do. That is how ALL international businesses operate. So you have more reasons than that one with only THEIR interest in having OFFSHORE base company!

Firstly I'm not American, I live and run a business in the UK, I know a bit about the US business laws because I took it upon myself to find out when I started selling through the US.

What you said Jon & SS could do may be correct, and yes some companies do that, however you're missing the whole point, this discussion all started because of SS implementing 'US tax withholding', what you're forgetting is that this is effecting the contributors financially NOT Jon or SS, it might cause them some more hassle with the paperwork and there may well be some underlying reason why up until this point they hadn't withheld the money, there may even be some financial implications regarding that between SS and the IRS who knows, but at the end of the day up until now Jon has decided that he only wants to be a US based company, so apart from appeasing a small minority of foreign contributors who are not subject to a tax treaty with the US why do you think he should go to all the trouble and expense of opening an overseas office if he's quite happy running the company the way he has so far?

It's very easy for you to say run he should run an offshore company but you're thinking of it from your point of view because you're about to be financially effected, he isn't so why should he if he's happy where he is and happy to pay the tax his company is paying?


Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: RT on June 02, 2009, 10:30
I am set up as a limited company so as such I am employed by my company do I still apply for a ITIN number with a W-7 form? or do I have to use another form?

No in their eyes you're an equivalent of what they call an LLC and as such you need an EIN number, quick phonecall to the states, no paperwork, no returns and you'll get the number straight away. Be sure to tell them you are the one that runs the company, how many employees you have, the registered company address (they don't ask for numbers)  and that you complete an annual tax return via the Inland revenue.
Once you've got the EIN number just wait for SS to set up their online W-8BEN form and complete that.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: shutterdrop on June 02, 2009, 10:33
Money, Money, Money it is the juice that runs all governments. Turbo Tax Timmy is tightening the noose of the International Tax Code. SS and all the rich Non-US photographers will provide some more juice to the US Government.

You gotta give Turbo Tax Timmy and Obama a great hand to go after All those Rich People and make them pay their Taxes! [Greedy US Corporations]

What a brilliant move go after non-US contributor that can't vote against the current administration. I have to say it is an absolutely brilliant political move.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on June 02, 2009, 10:40
Richard (RT) I have a couple of questions for you since I'm trying to figure out what to do, myself, for the best.

Is your company taxed at less than the 30% ?

** what I mean is *** .. is the rate you pay as a company to the UK less than 30%.

Would you have any idea roughly the rate which it approximates to. Do UK (Ltd?) companies have any sort of threshold allowance before tax even kicks in ?

I know I should ask an accountant but I'm trying to gather a bit of info ahead of having that conversation.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Milinz on June 02, 2009, 10:48
...
...
...

Firstly I'm not American, I live and run a business in the UK, I know a bit about the US business laws because I took it upon myself to find out when I started selling through the US.

What you said Jon & SS could do may be correct, and yes some companies do that, however you're missing the whole point, this discussion all started because of SS implementing 'US tax withholding', what you're forgetting is that this is effecting the contributors financially NOT Jon or SS, it might cause them some more hassle with the paperwork and there may well be some underlying reason why up until this point they hadn't withheld the money, there may even be some financial implications regarding that between SS and the IRS who knows, but at the end of the day up until now Jon has decided that he only wants to be a US based company, so apart from appeasing a small minority of foreign contributors who are not subject to a tax treaty with the US why do you think he should go to all the trouble and expense of opening an overseas office if he's quite happy running the company the way he has so far?

It's very easy for you to say run he should run an offshore company but you're thinking of it from your point of view because you're about to be financially effected, he isn't so why should he if he's happy where he is and happy to pay the tax his company is paying?


Well, now you sound very smart! If you'd started on this way I'd never say you are talking stupid - because this your last post isn't stupid!

There are several implications on runing International business. If Jon finds him not OK with just 50% of images he has now because other 50% of images are owned by non-treaty authors then he has problem how to keep those authors. If it is true what you say that 100 countries with which USA don't have treaty doesn't originate significant number of authors and what is more important: significant number of images, then he may do as you say - nothing. He already said 'comply or leave'.
Also all there is that harrasment about papers needed to be sent to all authors with withheld 30% or other percentage to show to their tax autorities as proof they've payed tax in USA, calculating different tax percentage to any sale and any contributor solely, many hassle about how many from whom and in which case and at last total computing of how many money is to be payed to IRS will cost Shutterstock at least 2 new wages for new employees capable to handle that paper work! That employees will must be payed the same ammount or even more as if SS opens BLABLA company in Ireland! There is much easier way for international contributors to comply to UK paperwoork than to USA paperwork needed to be eliglible to be treated as tax-treaty contributors as well as many more authors will have less percentage withhdrawn from UK based company than from USA based company. It is also in question IF there is the same law inforcement about some limits needed to withhdraw or not in UK. Also, there are much more USA buyers than UK buyers, so it is cheaper to all contributors to contribute to UK based company.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: RT on June 02, 2009, 10:57
Richard (RT) I have a couple of questions for you since I'm trying to figure out what to do, myself, for the best.

Is your company taxed at less than the 30% ?

** what I mean is *** .. is the rate you pay as a company to the UK less than 30%.

Would you have any idea roughly the rate which it approximates to. Do UK (Ltd?) companies have any sort of threshold allowance before tax even kicks in ?

I know I should ask an accountant but I'm trying to gather a bit of info ahead of having that conversation.

It's not something I can easily answer mainly because we're not like the US when it comes to tax, in the UK the better accountant you have the less tax you pay.
A lot of people in the UK become a Ltd company and pay themselves the basic wage and they then get dividends as a director, or as a sole trader you can forever show a loss as long as your books are balanced out correctly, some register for VAT when they don't need to others don't.
It all comes down to individual circumstances, my advice would be not to seek the advice of an accountant, seek the advice of a tax consultant first, then when it comes to looking like you're going to have to do a tax return use an accountant. Accountants can only account for your business finances they're not meant to help you avoid paying tax, a tax consultant will advise you the best ways to deal with tax in your circumstances so that when you present the paperwork to the accountant they know what to account for  ;)
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: luceluceluce on June 02, 2009, 10:58
Hi guys. I've been skimming this thread (it's a lengthy one) and there's something I don't quite understand. As far as I can tell this 30% tax only applies if you don't file the proper paperwork, is that right? And I do understand that filing such paperwork can be a hassle, but it also sounds like it can be done via mail to the IRS. Is that right?

If that is true, then why is this such a big deal? I know I won't win any popularity contests with that sort of question in this thread, but really I'm just trying to get my head around this issue. The amount of fury and anger directed at SS for this new policy would make it seem as though this 30% tax was unavoidable, yet from what I'm reading it sounds like it's just a matter of doing a little paperwork to get around it.

What am I missing here?


Hi Helix7
I'm from a 0% treaty country, and therefore i am (THEORETICALLY) saved from double taxation.  My objections are primarily about the hoops i must run through to obtain what is rightfully mine.  Also, i will have to think twice about the costs involved.  Also there are concerns about the timetables given for compliance, and how to reclaim tax incorrectly taken. Also I have concerns about privacy. Also i have concerns about companies that have major obstacles to doing business. also i have concerns about the ethical and political dimensions of this IRS action. Also, i have concerns that other countries will relatiate with their own protectionist clawback measures. Also, i feel a sense of solidarity with my non-treaty friends - and as they are helping me, so i wish to help them.

i know the strong reaction probably seemed strange and unexpected to many people. But i think it was a mistake to underestimate the strength of feeling people have at being told to pay tax to the US (or to go to great time and expense to avoid it).

Right or wrong, America is famous. Right or wrong, foreigners will react strongly if US measures start to affect us personally.  This has a vast political dimension, which i wouldn't touch with a barge pole on this forum.

Lucy
x




Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: KiwiRob on June 02, 2009, 11:20
I don't see any of the large portfolios complaining about this.  And they have the most to lose financially from this.  Why is that?  Where is the complaining from the top portfolios in the world (Mr. Arcurs, or Ms. Pargeter, or Andresr, etc. etc.)?  They stand to lose large sums of money from all of this.  Yet are they moaning about this on the forums?


Ah but it isn't going to be a problem for Mr Arcurs because he is a tax citizen of Denmark which has a tax treaty with the US so he won't get pinged, plus his business is large enough to justy the time and hassle of getting this sorted out, he probably has an accountant all over it already. It's the guys with large portfolios in non tax treaty countries who will probably make a silent protest and bugger off. Me I don't care, one way or other, I just think SS haven't handled the situation in a very professional manner, the CEO has acted like a big baby which didn't help at all. The US can have my $10 a month tax, I hope they use it wisely and don't spend it on anything stupid.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on June 02, 2009, 11:24
Thanks RT.

I wonder whether you would indulge me. Let me try my question another way.

Suppose you could legally pay the 30% US withholding in exchange for no other tax liability where you live. Would you think that would likely be a deal which was worth considering financially?

Sure there would be lots of other factors. But if it was just as simple as an either or?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: KiwiRob on June 02, 2009, 11:30
Hi guys. I've been skimming this thread (it's a lengthy one) and there's something I don't quite understand. As far as I can tell this 30% tax only applies if you don't file the proper paperwork, is that right? And I do understand that filing such paperwork can be a hassle, but it also sounds like it can be done via mail to the IRS. Is that right?

If that is true, then why is this such a big deal? I know I won't win any popularity contests with that sort of question in this thread, but really I'm just trying to get my head around this issue. The amount of fury and anger directed at SS for this new policy would make it seem as though this 30% tax was unavoidable, yet from what I'm reading it sounds like it's just a matter of doing a little paperwork to get around it.

What am I missing here?




it's a little paperwork which actually costs a lot of money, this little piece of paperwork will only help some contributorrs ie those living in countries with a tax treaty with the US, all those that don't get hit with 30% regardless of weither they fill out the form or not, then those poor sods will get hit with there own tax, so in essence these folks will only earn 22 cents per image less local tax, kinda makes working for SS pointless if you live in a non tax treaty country.

Note you only pay the 30% tax if the image was purchased by a US entity, but since most of the sales are to US entities you're still screwed out of a lot of income.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: RT on June 02, 2009, 12:15
Suppose you could legally pay the 30% US withholding in exchange for no other tax liability where you live. Would you think that would likely be a deal which was worth considering financially?

Speaking personally - You have got to be joking  :D That 30% could buy a lot of very necessary toys business equipment that can be written off against your tax return.


Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: gbalex on June 02, 2009, 12:51
You are talking rubbish... It doesn't have anything to do with international business handling. ALL INTERNATIONAL BUSINESSES have OFFICES AND ARE FUNCTIONING ON TAX AVOIDANCE PRINCIPLES TO BE COMPETITIVE!


You make me laugh, you claim to be a CEO of an agency and yet you didn't know about the US tax laws and think it has nothing to do with international business  :D


Sorry dude your non-knowing things comes to level where I must say you are talking stupid. IF JON KNEW for that HOW TO RUN INTERNATIONAL COMPANY he'd made that this issue about tax never come up!

IF I am CEO on Shutterstock I'd make some Shutterstock company on Cayman Islands or in Ireland and handle things as any other serious company handling things about taxes.

My company don't do business with USA because we are more with EU and Asian markets which bring us less harrasment to complete business!

And YES - US TAX doesn't have not single influence in running international business!


Milinz if you set up a stock company in Ireland you would find your new company in exactly the same predicament SS finds itself in now.

When the Irish tax authorities find out that you are paying royalties from your new stock photo firm they have the very same right to tax royalty income that arises and is payed by a company in their state AKA Ireland!

Below you will find the Tax Treaty agreement which Ireland has made with 50 countries.

Ireland's Tax Treaty agreement regarding ROYALTIES (which is what micro stock is covered under) is covered in (ARTICLE 12)

http://www.revenue.ie/en/practitioner/law/tax-treaties.html (http://www.revenue.ie/en/practitioner/law/tax-treaties.html)

Commentary on typical provisions of Irish tax treaties
http://www.revenue.ie/en/practitioner/law/commentary_irishtaxtreaties.pdf (http://www.revenue.ie/en/practitioner/law/commentary_irishtaxtreaties.pdf)

"ROYALTIES (ARTICLE 12)

This article provides rules for the taxation of royalties. It limits the taxation in the source State of royalties paid to a resident of the other State. While the OECD model treaty grants full exemption from taxation in the source State, many Irish treaties allow for reduced rates of taxation of gross royalty payments.

The term “royalties” is defined in the article and covers payments in respect of copyright of literary, artistic or scientific work as well as patents and trademarks. Some treaties also cover leasing payments – “payments for the use of, or the right to use, industrial, commercial or scientific equipment” – which would otherwise normally come under Article 7 (Business Profits).

The source State retains the right to tax royalties attributable to a permanent establishment of the beneficial owner in that State. In that case, the provisions of Article 7 (Business Profits) will apply and the source State may tax the income at the normal business tax rate.

Royalties are deemed to arise in the Contracting State that the payer is a resident of or, if paid in connection with a permanent establishment in the Contracting State, in the State where the permanent establishment is situated.

In cases involving special relationships between the payer and beneficial owner of a royalty, the provisions of the article will only apply to the extent that the royalty does not exceed the amount that would have been paid between parties at arm’s length."
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on June 02, 2009, 12:52
Suppose you could legally pay the 30% US withholding in exchange for no other tax liability where you live. Would you think that would likely be a deal which was worth considering financially?

Speaking personally - You have got to be joking  :D That 30% could buy a lot of very necessary toys business equipment that can be written off against your tax return.

OK thanks. You are fortunate to live in place which has a tax treaty. That makes things simple.

I'm super tax efficient. So nothing for me to offset against the 30% withholding which I am unfortunately stuck with if I continue to deal with US agencies which do not have regional offices. Since I already pay none. Or else I might move to the UK and pay less than none:)
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on June 02, 2009, 13:06
@gbalex

More or less the same treaty exists between Canada and many other countries does it not? It is based on what is basically an OECD template. The reserved right to levy taxes is not the same as a policy to levy taxes.

I'm curious why only the US levies these taxes and / or withholding taxes.

However there is another issue. The treaty you are quoting details the tax arrangements which exist between nations which have a treaty. It does not detail the arrangements which exist where there is no treaty.

I'm not arguing with you. Just saying that what you are quoting is not the full answer.

Finally. I wonder whether non treaty photographers would end up paying less than 30% if they actually submitted a US tax return c/w deductions, costs, offsets etc.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: gbalex on June 02, 2009, 13:19
@gbalex

More or less the same treaty exists between Canada and many other countries does it not? It is based on what is basically an OECD template. The reserved right to levy taxes is not the same as a policy to levy taxes.

I'm curious why only the US levies these taxes and / or withholding taxes.

However there is another issue. The treaty you are quoting details the tax arrangements which exist between nations which have a treaty. It does not detail the arrangements which exist where there is no treaty.

I'm not arguing with you. Just saying that what you are quoting is not the full answer.

Finally. I wonder whether non treaty photographers would end up paying less than 30% if they actually submitted a US tax return c/w deductions, costs, offsets etc.

Yes Canada has a very similar tax treaty agreement and yes you are correct... most countries have the same wording in their tax treaties. This levels the playing field so that we can all do business together globally. 

I can not comment on the countries which have not signed the agreements.  However many small countries have.

If you talk to business leaders and owners who's businesses pay royalties you will find that governments do levy tax's on royalties that arise in their states or countries.  This is certainly not a new development.

It looks like microstock companies are/were unaware of these tax treaty requirements or they have decided to ignore them until the payees are/were forced to comply!





Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on June 02, 2009, 13:36
@gbalex

I think that what creates the difference with the US and US companies has its roots in the way in which US citizens have a liability to be taxed on their international earnings whether or not they even live or are even domiciled in the US. Very few nations do that. From that follows a whole different approach to collecting taxes.

Govts apart from the US are not collecting taxes on photo royalties.

**** sorry - to add: apart from the taxes which the agencies actually pay. Which is a different matter.

That is not a mistake.

Sure it might change. I'm not arguing with you.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Dark_Angel on June 02, 2009, 13:43
I'm not an expert on these things. Can somebody explain, why someone in an 0%-treaty-country has to do this paperwork? I do not see the point yet.  ???
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: luceluceluce on June 02, 2009, 14:19
I'm not an expert on these things. Can somebody explain, why someone in an 0%-treaty-country has to do this paperwork? I do not see the point yet.  ???
Well, i phoned up the IRS today and asked them if instead of a notarised and apostilled passport they would instead accept vast amounts of incredulity.

No go, I'm afraid. And i was on the phone for hours, being totally charming... : (

I think the IRS require evidence that we are who we say we are; just in case we're no good darn cheaters trying to pretend to be british, or french, or some other foreigner when we're really not.

The story so far is that there is no way out of it. But stories have changed before..... : )

x
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: username on June 02, 2009, 14:22
Oringer wrote:

3) If you don't want to deal with this, then leave. We are happy to remove all your images for you. If I continue to read threads on the forum that you will be taking your images elsewhere, I will delete them myself and close your account. I've done it a few times already- I am not kidding about this.

This remind me of Michael Manley of Jamaica.
During his administration in a speech he said:

"...there are five flights a day from Jamaica to Miami. If anyone do not like what I do, they should take one."

Many did.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Dark_Angel on June 02, 2009, 14:32
Well, i phoned up the IRS today and asked them if instead of a notarised and apostilled passport they would instead accept vast amounts of incredulity.

No go, I'm afraid. And i was on the phone for hours, being totally charming... : (

I think the IRS require evidence that we are who we say we are; just in case we're no good darn cheaters trying to pretend to be british, or french, or some other foreigner when we're really not.

The story so far is that there is no way out of it. But stories have changed before..... : )

x

As far as I remember I had to upload a copy of my passport when registering to Shutterstock ;)
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: gbalex on June 02, 2009, 14:49
@gbalex

I think that what creates the difference with the US and US companies has its roots in the way in which US citizens have a liability to be taxed on their international earnings whether or not they even live or are even domiciled in the US. Very few nations do that. From that follows a whole different approach to collecting taxes.

Govts apart from the US are not collecting taxes on photo royalties.

**** sorry - to add: apart from the taxes which the agencies actually pay. Which is a different matter.

That is not a mistake.

Sure it might change. I'm not arguing with you.


Spend a bit of time on Alamy's site... they are a UK company.

http://www.alamy.com/example-tax-payments.asp (http://www.alamy.com/example-tax-payments.asp)
"If you are not located in the following territories you need to review the Table of Treaty Rates which sets out the DTT (Double Tax Treaty) relief you may be eligible for. The table below assumes that you are eligible for the DTT relief.

Table of example payments for individual contributors"



http://en.wikipedia.org/wiki/Alamy (http://en.wikipedia.org/wiki/Alamy)
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Milinz on June 02, 2009, 15:07
Suppose you could legally pay the 30% US withholding in exchange for no other tax liability where you live. Would you think that would likely be a deal which was worth considering financially?

Speaking personally - You have got to be joking  :D That 30% could buy a lot of very necessary toys business equipment that can be written off against your tax return.


Yes, that is main problem - some of unlisted countries do not recognize TAX payed to IRS. Maybe some people will need to notarize that IRS papers too and pay extra money for getting some tax extemption from your tax office in your country... And that comes to hassle without any justifying cause... In most cases 30% that is withheld in USA can't be calculated as payed tax in country where author lives... That means double-taxing!

Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on June 02, 2009, 15:16
@gbalex

I think that what creates the difference with the US and US companies has its roots in the way in which US citizens have a liability to be taxed on their international earnings whether or not they even live or are even domiciled in the US. Very few nations do that. From that follows a whole different approach to collecting taxes.

Govts apart from the US are not collecting taxes on photo royalties.

**** sorry - to add: apart from the taxes which the agencies actually pay. Which is a different matter.

That is not a mistake.

Sure it might change. I'm not arguing with you.


Spend a bit of time on Alamy's site... they are a UK company.

[url]http://www.alamy.com/example-tax-payments.asp[/url] ([url]http://www.alamy.com/example-tax-payments.asp[/url])
"If you are not located in the following territories you need to review the Table of Treaty Rates which sets out the DTT (Double Tax Treaty) relief you may be eligible for. The table below assumes that you are eligible for the DTT relief.

Table of example payments for individual contributors"



[url]http://en.wikipedia.org/wiki/Alamy[/url] ([url]http://en.wikipedia.org/wiki/Alamy[/url])


OK - In general i definitely would bow to your superior knowledge. But I want to ask this .

Are you absolutely certain that the page you have linked to is not actually about a VAT change rather than being about a tax on royalties? Is that page actually about something which is like the US withholding tax? I am not sure that it is.

That pages seems to relate to VAT. The table columns seem to be about VAT. VAT is what people in the US call 'sales tax'. Same as applies in most US states.

And that would make sense in the context of it being about a switch from Alamy Jersey to Alamy UK. Since Jersey is crown dependency but not part of the UK, makes its own regulation and does not levy VAT ( - or did not. IIRC I read that they are / might be introducing it). So moving from a relationship with Alamy Jersey to one with Alamy UK would involve dealing with UK VAT.

I could be completely wrong.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Milinz on June 02, 2009, 15:27
...


...


...


Milinz if you set up a stock company in Ireland you would find your new company in exactly the same predicament SS finds itself in now.

When the Irish tax authorities find out that you are paying royalties from your new stock photo firm they have the very same right to tax royalty income that arises and is payed by a company in their state AKA Ireland!

Below you will find the Tax Treaty agreement which Ireland has made with 50 countries.

Ireland's Tax Treaty agreement regarding ROYALTIES (which is what micro stock is covered under) is covered in (ARTICLE 12)

[url]http://www.revenue.ie/en/practitioner/law/tax-treaties.html[/url] ([url]http://www.revenue.ie/en/practitioner/law/tax-treaties.html[/url])

Commentary on typical provisions of Irish tax treaties
[url]http://www.revenue.ie/en/practitioner/law/commentary_irishtaxtreaties.pdf[/url] ([url]http://www.revenue.ie/en/practitioner/law/commentary_irishtaxtreaties.pdf[/url])

"ROYALTIES (ARTICLE 12)

This article provides rules for the taxation of royalties. It limits the taxation in the source State of royalties paid to a resident of the other State. While the OECD model treaty grants full exemption from taxation in the source State, many Irish treaties allow for reduced rates of taxation of gross royalty payments.

The term “royalties” is defined in the article and covers payments in respect of copyright of literary, artistic or scientific work as well as patents and trademarks. Some treaties also cover leasing payments – “payments for the use of, or the right to use, industrial, commercial or scientific equipment” – which would otherwise normally come under Article 7 (Business Profits).

The source State retains the right to tax royalties attributable to a permanent establishment of the beneficial owner in that State. In that case, the provisions of Article 7 (Business Profits) will apply and the source State may tax the income at the normal business tax rate.

Royalties are deemed to arise in the Contracting State that the payer is a resident of or, if paid in connection with a permanent establishment in the Contracting State, in the State where the permanent establishment is situated.

In cases involving special relationships between the payer and beneficial owner of a royalty, the provisions of the article will only apply to the extent that the royalty does not exceed the amount that would have been paid between parties at arm’s length."




There is one little difference...

UK and Northern Ireland is mentioned somewhere in some other treaty I've found... So, I think it says 10% for most of listed countries.
In USA there is no list as well there is no way to legally ask from many other governmets that 30% to be calculated into domestic tax needed to pay ;-)

So be my guest and read this list with carefuly counting listed countries:

http://www.hmrc.gov.uk/international/in_force.htm (http://www.hmrc.gov.uk/international/in_force.htm)

So, you will find there is 121 Country listed which is mere double than in USA list!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: gbalex on June 02, 2009, 15:49
...


...


...


Milinz if you set up a stock company in Ireland you would find your new company in exactly the same predicament SS finds itself in now.

When the Irish tax authorities find out that you are paying royalties from your new stock photo firm they have the very same right to tax royalty income that arises and is payed by a company in their state AKA Ireland!

Below you will find the Tax Treaty agreement which Ireland has made with 50 countries.

Ireland's Tax Treaty agreement regarding ROYALTIES (which is what micro stock is covered under) is covered in (ARTICLE 12)

[url]http://www.revenue.ie/en/practitioner/law/tax-treaties.html[/url] ([url]http://www.revenue.ie/en/practitioner/law/tax-treaties.html[/url])

Commentary on typical provisions of Irish tax treaties
[url]http://www.revenue.ie/en/practitioner/law/commentary_irishtaxtreaties.pdf[/url] ([url]http://www.revenue.ie/en/practitioner/law/commentary_irishtaxtreaties.pdf[/url])

"ROYALTIES (ARTICLE 12)

This article provides rules for the taxation of royalties. It limits the taxation in the source State of royalties paid to a resident of the other State. While the OECD model treaty grants full exemption from taxation in the source State, many Irish treaties allow for reduced rates of taxation of gross royalty payments.

The term “royalties” is defined in the article and covers payments in respect of copyright of literary, artistic or scientific work as well as patents and trademarks. Some treaties also cover leasing payments – “payments for the use of, or the right to use, industrial, commercial or scientific equipment” – which would otherwise normally come under Article 7 (Business Profits).

The source State retains the right to tax royalties attributable to a permanent establishment of the beneficial owner in that State. In that case, the provisions of Article 7 (Business Profits) will apply and the source State may tax the income at the normal business tax rate.

Royalties are deemed to arise in the Contracting State that the payer is a resident of or, if paid in connection with a permanent establishment in the Contracting State, in the State where the permanent establishment is situated.

In cases involving special relationships between the payer and beneficial owner of a royalty, the provisions of the article will only apply to the extent that the royalty does not exceed the amount that would have been paid between parties at arm’s length."




There is one little difference...

UK and Northern Ireland is mentioned somewhere in some other treaty I've found... So, I think it says 10% for most of listed countries.
In USA there is no list as well there is no way to legally ask from many other governmets that 30% to be calculated into domestic tax needed to pay ;-)

So be my guest and read this list with carefuly counting listed countries:

[url]http://www.hmrc.gov.uk/international/in_force.htm[/url] ([url]http://www.hmrc.gov.uk/international/in_force.htm[/url])

So, you will find there is 121 Country listed which is mere double than in USA list!


Ireland which is where you stated would be a good country to set up a micro stock company has entered into tax treaty agreements with 50 countries.  The US has entered into tax treaty agreements with 68 countries. 

The percentage of tax liability required varies for each country according to those agreements.

Here is an example for Australia

"Australian tax agreement rates

Australia has entered into tax agreements with over 40 countries. These agreements prevent double taxation, reduce opportunities for tax evasion, and foster cooperation between Australia and other international tax authorities in enforcing their respective tax laws.

Australia’s tax agreements provide different tax rates for particular payments. For countries marked with an asterisk in the table below, please see ‘Notes’ following the table for an explanation of the different rates that apply to unfranked dividend and royalty payments. The notes also cover the interest withholding tax exemptions in the US and UK agreements."

http://www.ato.gov.au/businesses/content.asp?doc=/Content/50240.htm&page=15 (http://www.ato.gov.au/businesses/content.asp?doc=/Content/50240.htm&page=15)
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on June 02, 2009, 16:05
@gbalex

Ireland does not deduct tax from photographers against royalties. Nor does any other nation which anyone can think of apart form the US. The fact that the OECD tax treaty template allows for that is quite a different matter.

The Alamy page you linked to seems to relate to UK VAT which is equivalent to US sales tax.

You seem to be accidentally confusing issues relating to royalties and sales tax and linking to stuff about tax treaties.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Milinz on June 02, 2009, 16:10
@gbalex

Ireland does not deduct tax from photographers against royalties. Nor does any other nation which anyone can think of apart form the US. The fact that the OECD tax treaty template allows for that is quite a different matter.

The Alamy page you linked to seems to relate to UK VAT which is equivalent to US sales tax.

You seem to be accidentally confusing issues relating to royalties and sales tax and linking to stuff about tax treaties.

Sorry is Ireland not in UK? Maybe Ireland have its own international tax system?

Never mind then, London is place to setup stock agency. There is 121 country listed with that tax treaty. And yes OECD has great deal with not taxing in advance as US does.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: gbalex on June 02, 2009, 16:44
@gbalex

I think that what creates the difference with the US and US companies has its roots in the way in which US citizens have a liability to be taxed on their international earnings whether or not they even live or are even domiciled in the US. Very few nations do that. From that follows a whole different approach to collecting taxes.

Govts apart from the US are not collecting taxes on photo royalties.

**** sorry - to add: apart from the taxes which the agencies actually pay. Which is a different matter.

That is not a mistake.

Sure it might change. I'm not arguing with you.


Spend a bit of time on Alamy's site... they are a UK company.

[url]http://www.alamy.com/example-tax-payments.asp[/url] ([url]http://www.alamy.com/example-tax-payments.asp[/url])
"If you are not located in the following territories you need to review the Table of Treaty Rates which sets out the DTT (Double Tax Treaty) relief you may be eligible for. The table below assumes that you are eligible for the DTT relief.

Table of example payments for individual contributors"



[url]http://en.wikipedia.org/wiki/Alamy[/url] ([url]http://en.wikipedia.org/wiki/Alamy[/url])


OK - In general i definitely would bow to your superior knowledge. But I want to ask this .

Are you absolutely certain that the page you have linked to is not actually about a VAT change rather than being about a tax on royalties? Is that page actually about something which is like the US withholding tax? I am not sure that it is.

That pages seems to relate to VAT. The table columns seem to be about VAT. VAT is what people in the US call 'sales tax'. Same as applies in most US states.

And that would make sense in the context of it being about a switch from Alamy Jersey to Alamy UK. Since Jersey is crown dependency but not part of the UK, makes its own regulation and does not levy VAT ( - or did not. IIRC I read that they are / might be introducing it). So moving from a relationship with Alamy Jersey to one with Alamy UK would involve dealing with UK VAT.

I could be completely wrong.


It outlines both Vat and the rates for withholding's taxes charged to to foreigners outside of the UK as outlined in the UK's tax treaty's

http://www.alamy.com/stock-photography-faqs-tax-non-uk.asp (http://www.alamy.com/stock-photography-faqs-tax-non-uk.asp)

# What is Withholding Tax (WHT)?
Withholding Tax (WHT) is a government's imposition of a tax on distributions being made to foreigners. The purpose of the tax is to allow the government to make sure it exacts its share of a taxable event before the wealth leaves its shores and moves beyond its control. Thus, in Alamy's case it is the tax Alamy has to deduct and account for to the UK government when it is making royalty payments for the use of images to providers of those images who are not tax resident in the UK. It will only apply to Contributors who are NOT tax resident in the United Kingdom and who are paid outside of the UK mainland.

# What do you mean by tax resident?
You will normally be tax resident in the country in which you pay your tax bills and where you submit your tax return. However, tax residence is a complex subject which is determined by local legislation and case law in each country. We therefore recommend that you obtain confirmation from your local tax authority if you are uncertain as to your tax residence status.

# What do you mean by UK mainland?
The United Kingdom mainland comprises England, Wales, Scotland and Northern Ireland but excludes the Channel Islands and the Isle of Man.

# How will this affect the payments made to me?
During registration you will be required to supply your tax details including an assurance regarding the country where you are registered for tax. Alamy will deduct withholding tax from your payment in line with the double tax treaty between the country you are tax resident in and the United Kingdom. This rate can vary from between 0% to 22%. For further details, please visit our Table of Treaty Rates.

If you do not answer the questions relating to Withholding Tax within My Alamy, then Alamy will deduct 22% of the net amount due to you in each payment run.

# What is the standard rate of WHT?
The standard rate of the tax in the UK is 22%. This is applicable for all payments relating to photographic royalties to all countries.

# Can I reduce the rate of WHT that I pay?
Yes. If there is a double tax treaty between the country you are resident in and the UK and you can assure Alamy that you are tax resident in that country then we can apply the treaty rate on all payments to you. The treaty rate in many cases, e.g. for the US and Canada reduces the rate of WHT from 22% to 0%.

# How I can inform you that I qualify for a reduced rate of WHT?
If you are already a registered Contributor then you need to provide details via the payment and tax details page. If you are a new contributor you need to answer the questions during the registration process.

# How will you deduct WHT from payments to me?
Alamy will deduct WHT at the applicable rate of tax from the net amount to be paid out to you after deduction of payment fees and any foreign exchange fees.

# How will I see WHT on my statement?
It will be a line item on your statement when a payment is made to you. It will appear after the payment and FX fees, but before the cheque sent/funds transfer line.

# What does Alamy do with the money deducted for WHT?
Alamy will pay over the money deducted to the proper government department responsible for the collection of this tax in the UK.
The money deducted is not our income and we do not benefit from deducting it.

# What do you mean by "Will you be making royalty payments to other photographers from the money you receive from Alamy"?
Do the images submitted by yourself as a Contributor include images that are not your own, i.e. you are representing these images on behalf of other photographers. If this is the case do you have to pay the respective photographers for their work dependent on your receipts from Alamy? For example, if you paid a one off price to another photographer to either own the rights to the image, or you have acquired the right to exploit the image, then you would answer no, but if you pay a percentage of any sales from that image to a photographer you would answer yes.

# I do not make royalty payments to other photographers but I do not understand the following statement:

    "Please confirm whether you are beneficially entitled to income you will receive from Alamy and that you meet the necessary conditions for the payment to be received gross under the relevant treaty between the country in which you are tax resident, and the United Kingdom"?

The statement asks whether you are beneficially entitled to the income, i.e. you should be beneficially entitled to the income as long as you legally own the rights to the images or you have acquired the right to exploit the image and underlying copyright from the legal owner. You will normally meet the necessary conditions for the payment to be received at the relevant treaty rate as long as you are tax resident in the country in which you have said you are resident. However, if you have any doubt as to your eligibility to benefit from the relevant double tax treaty then you should review the said tax treaty to ensure that you are not excluded by virtue of any specific terms of the treaty agreement.

# I make payments to other photographers but I do not know whether all my photographers are tax resident in the same country as I, what should I do?
You should continue to register or provide your details and finish the process by answering "No, not all 3 statements apply to me". You should then attempt to find out whether your photographers are tax resident in the same country as yourself, and if so, you can then come back and complete the details field again. If you find that not all of the photographers are tax resident in the same country as yourself then you should contact [email protected] with the breakdown of photographers. We can then contact you, as it is likely that we will need to find out more information from you.

# I make payments to other photographers who are all tax resident in the same country as myself but I do not understand the following statement:

    "That they, the beneficial owners of the income, meet the necessary conditions for the payment to be received gross under the relevant treaty between the country in which you are tax resident, and the United Kingdom."?

The statement asks whether the photographers you represent are beneficially entitled to the income, i.e. they should be entitled to the income as long as they legally own the rights to the images or they have acquired the right to exploit the image and underlying copyright from the legal owner. They will normally meet the necessary conditions for the payment to be received at the relevant treaty rate as long as they are tax resident in the country in which you have said they are resident. However, if you have any doubt as to their eligibility to benefit from the relevant double tax treaty then you should review the said tax treaty to ensure that you or them are not excluded by virtue of any specific terms of the treaty agreement.

# What do I do if my circumstances change?
You should update the Alamy website with your new details as soon as possible.

# How will I receive deduction certificates stating how much tax you have deducted?
Alamy will send out certificates every year. The certificates will state for each payment made to you how much tax was deducted in US$, the rate of tax, the date of payment and how much the gross payment was. The information will be in US$, as this is the currency your statement is in.

# What is the DTT rate for the territory I am tax resident in?
For further details, please visit our Table of Treaty Rates.

# Table of implications for WHT
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: alias on June 02, 2009, 17:06
@gbalex

You seem to be completely correct.

Can only be a matter of time before this becomes more widespread and not just with US agencies.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: gbalex on June 02, 2009, 17:16
@gbalex

You seem to be completely correct.

Can only be a matter of time before this becomes more widespread and not just with US agencies.

That is my conclusion!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: madelaide on June 02, 2009, 18:37
Sorry is Ireland not in UK? Maybe Ireland have its own international tax system?

The Republic of Ireland, or Eire, is not UK.  Missed some geography classes?   ;)
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Milinz on June 02, 2009, 19:35
Sorry is Ireland not in UK? Maybe Ireland have its own international tax system?


The Republic of Ireland, or Eire, is not UK.  Missed some geography classes?   ;)


http://en.wikipedia.org/wiki/Northern_Ireland (http://en.wikipedia.org/wiki/Northern_Ireland)

"UK/YUGOSLAVIA DOUBLE TAXATION CONVENTION
SIGNED 6 NOVEMBER 1981
(CONTINUES TO APPLY TO SERBIA & MONTENEGRO)
....
CONVENTION BETWEEN THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE SOCIALIST FEDERAL REPUBLIC OF YUGOSLAVIA FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME
...
General Definitions
(1) For the purposes of this Convention:
(a) The term "United Kingdom" means Great Britain and Northern Ireland, including any area outside the territorial sea of the United Kingdom which in accordance with international law has been or may hereafter be designated, under the laws of the United Kingdom concerning the Continental Shelf, as an area within which the rights of the United Kingdom with respect to the sea bed and sub-soil and their natural resources may be exercised;
(b) the term "Yugoslavia" means the territory of the Socialist Federal Republic of Yugoslavia including also any area outside the territorial sea of Yugoslavia which has been or may hereafter be designated under the laws of Yugoslavia and in accordance with international law, as an area within which the rights of Yugoslavia to the sea bed and sub-soil and their natural resources may be exercised;
(c) the term "national" means:
(i) in relation to the United Kingdom, any citizen of the United Kingdom and Colonies who derives his status as such from his connection with the United Kingdom;
(ii) in relation to Yugoslavia, a Yugoslav citizen and any other individual who derives his status as such from the law in force in Yugoslavia;
(d) the term "United Kingdom tax" means tax imposed by the United Kingdom being tax to which this Convention applies by virtue of the provisions of Article 2; the term "Yugoslav tax" means taxes and contributions, with the exception of the contribution for social security, imposed in Yugoslavia being tax to which this Convention applies by virtue of the provisions of Article 2;
(e) the term "tax" means United Kingdom tax or Yugoslav tax, as the context requires;
"

Btw here is whole treaty and you read it ;-)


http://www.hmrc.gov.uk/international/serbia-uk-double-taxation.pdf (http://www.hmrc.gov.uk/international/serbia-uk-double-taxation.pdf)
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Milinz on June 02, 2009, 19:45
@gbalex

You seem to be completely correct.

Can only be a matter of time before this becomes more widespread and not just with US agencies.

That is my conclusion!

BTW, I don't mind to have 'withheld' tax from UK government because my country justifies that and I have less to pay to my country as well that is not opposite for UK citizens who earn in Serbia, Montenegro, Croatia and rest of ex Yugoslavia.


The main difference is UK tax of 10% which will be calculated as payed before I have to pay my domestic tax and 30% withhdrawn from US IRS which will not be calculated as payed!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Phil on June 02, 2009, 19:47
I find it very interesting how the only people whining like babies about this are the people with extremely small portfolios.  And if I was Jon, I would remove your portfolios in a second.

I don't see any of the large portfolios complaining about this.  And they have the most to lose financially from this.  Why is that?  Where is the complaining from the top portfolios in the world (Mr. Arcurs, or Ms. Pargeter, or Andresr, etc. etc.)?  They stand to lose large sums of money from all of this.  Yet are they moaning about this on the forums?

This topic seems to have become an issue about U.S. politics (and should probably be moved as such to the ranting forums).  Well, let me tell you what the U.S. has done for most of you.  We have saved your butts from two World Wars.  Most of you would be living under a flag from Nazi Germany or the Land of the Rising Sun if it wasn't for the U.S.

You bitch and moan about the U.S. all the time, yet they are the ones that "keep the peace" around the world.  They could have conquered the world ten times over already, yet they are content with their small slice of the world over the pond.

Many of you complain about double taxation, yet many of your counties use a VAT system, which is the epitome of double (and triple and quadruple) taxation.

Why don't you people just get a life!

I wont comment about the tax / contributors. But ROFLAMO with the history and peacekeeping, I seriously hope that it is meant tongue in cheek  :)  
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: madelaide on June 02, 2009, 20:09
Sorry is Ireland not in UK? Maybe Ireland have its own international tax system?


The Republic of Ireland, or Eire, is not UK.  Missed some geography classes?   ;)


[url]http://en.wikipedia.org/wiki/Northern_Ireland[/url] ([url]http://en.wikipedia.org/wiki/Northern_Ireland[/url])


Northern Ireland is not Ireland.  Ireland (sites .ie) is another country.  You know, Dublin, St. Patrick, U-2, Guiness beer, James Joyce, Cliffs of Moher.
http://en.wikipedia.org/wiki/Ireland (http://en.wikipedia.org/wiki/Ireland)
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Lizard on June 02, 2009, 21:14


This topic seems to have become an issue about U.S. politics (and should probably be moved as such to the ranting forums).  Well, let me tell you what the U.S. has done for most of you.  We have saved your butts from two World Wars.  Most of you would be living under a flag from Nazi Germany or the Land of the Rising Sun if it wasn't for the U.S.

You bitch and moan about the U.S. all the time, yet they are the ones that "keep the peace" around the world.  They could have conquered the world ten times over already, yet they are content with their small slice of the world over the pond.




This doesn't belong here , but if provocations are allowed then the answer has to come

what are you talking about , USA always cared only about its ass. First you declared war to Japan after Pearl Harbor, and than Germany and Italy declared war to you because of that , but the fact is
that USA  avoided to declare war to directly to Germany at the same time they did to Japan. So you never entered the war before Axis declare it to you and that's a fact.  Again those conflict with Japan was for pure economical reasons , and by the way the backbone of your navy was destroyed in a single attack.

Second , if it wasn't for Soviet Union Hitler would have taken Europe without any problem , then got stronger and take it on you so you had no choice but to enter the war to save only your own asses.
If the Soviet union joined him as he planned , you would be also speaking German now and that's another  historical fact you cant avoid.

Again your bravery erupted few days before Japanese would declare defeat to the Soviet Union , so you started a nice genocide against pure civilians with atomic weapons only to avoid Eastern part of
the world falling in hand of Communists and protecting only your own interests. 

World peace , haha , yes sure , so you have to be thankful to the rest of the world as much as they have to be to you and no one owns you nothing.


And since you obviously like jokes lets me also throw one:


Yo know how US proved the existence of mass destruction weapons to UN  ?
Well ,luckily they kept the bill.


Big kiss
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: luceluceluce on June 02, 2009, 22:30
Well, i phoned up the IRS today and asked them if instead of a notarised and apostilled passport they would instead accept vast amounts of incredulity.

No go, I'm afraid. And i was on the phone for hours, being totally charming... : (

I think the IRS require evidence that we are who we say we are; just in case we're no good darn cheaters trying to pretend to be british, or french, or some other foreigner when we're really not.

The story so far is that there is no way out of it. But stories have changed before..... : )

x

As far as I remember I had to upload a copy of my passport when registering to Shutterstock ;)
I know! : D  i explained that too.... and also the fact that the british passport doesnt even have an address...

The good news is that i just read this

If you've communicated to us that you are in the process of acquiring an ITIN (or other relevant IRS paperwork), we will not withhold - please note this only applies to treaty country submitters. (This includes, as you mention below, if anyone gets rejected because of this technicality of what constitutes a "signed letter" from us.)

The above from the SS forum from the administrator.

It looks they have have made a promise that if  'you are in the process of acquiring an ITIN (or other relevant IRS paperwork), we will not withhold'  I don't know if what their Admins write in the forums can be  taken as fixed policy, and  hopefully this line will not change.

This is excellent news for all who were worried about the timescales for compliance.

Good news so far:

1.Only US sales will be taxed - not non-US sales
2. an appropriate letter is to be sent by SS
3. those in the process of applying will not have their tax withheld/witheld

I am happy that some of the issues continue to get resolved.

definitely check the ss forums for the latest tax situation.


x
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: luceluceluce on June 02, 2009, 22:38
This still doesnt help the non-treaty countries : (
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: luceluceluce on June 02, 2009, 22:52

 Well, let me tell you what the U.S. has done for most of you.  We have saved your butts from two World Wars.  Most of you would be living under a flag from Nazi Germany or the Land of the Rising Sun if it wasn't for the U.S.

You bitch and moan about the U.S. all the time, yet they are the ones that "keep the peace" around the world.  They could have conquered the world ten times over already, yet they are content with their small slice of the world over the pond.

I wont comment about the tax / contributors. But ROFLAMO with the history and peacekeeping, I seriously hope that it is meant tongue in cheek  :)  

Bravo you. I won't comment either : D

You know why?  IT'S NOT REAL

A straw man argument is an informal fallacy based on misrepresentation of an opponent's position.[1] To "attack a straw man" is to create the illusion of having refuted a proposition by substituting a superficially similar proposition (the "straw man"), and refuting it, without ever having actually refuted the original position.

it's generally considered a shoddy and lazy form of debate, and as such should not be dignified with any response except an astonishingly childish and stupid one.

This is my response
US what, who? Sorry, mate never heard of them. Next?
x
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: sharpshot on June 03, 2009, 02:49
StockManiac's comments do make me wonder if they have history lessons in the US.  Perhaps that is what the withholding tax will be spent on :)
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: photoagogo on June 03, 2009, 03:01
What? You'll be telling me Canada isn't part of the United States next... sheesh!

Sorry is Ireland not in UK? Maybe Ireland have its own international tax system?


The Republic of Ireland, or Eire, is not UK.  Missed some geography classes?   ;)


[url]http://en.wikipedia.org/wiki/Northern_Ireland[/url] ([url]http://en.wikipedia.org/wiki/Northern_Ireland[/url])


Northern Ireland is not Ireland.  Ireland (sites .ie) is another country.  You know, Dublin, St. Patrick, U-2, Guiness beer, James Joyce, Cliffs of Moher.
[url]http://en.wikipedia.org/wiki/Ireland[/url] ([url]http://en.wikipedia.org/wiki/Ireland[/url])
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: RT on June 03, 2009, 04:24
StockManiac's comments do make me wonder if they have history lessons in the US.  Perhaps that is what the withholding tax will be spent on :)

I think in some schools the history lessons must be taught by Hollywood directors.

However I don't want to get into a debate about who did what, none of us where there and yet some people like to take credit for what some very brave and courageous people did a long time ago, I'd imagine some of those who gave their lives from all countries involved would turn in their grave at his ridiculous comment "we saved your butts".
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Milinz on June 03, 2009, 05:05
Sorry is Ireland not in UK? Maybe Ireland have its own international tax system?


The Republic of Ireland, or Eire, is not UK.  Missed some geography classes?   ;)


[url]http://en.wikipedia.org/wiki/Northern_Ireland[/url] ([url]http://en.wikipedia.org/wiki/Northern_Ireland[/url])


Northern Ireland is not Ireland.  Ireland (sites .ie) is another country.  You know, Dublin, St. Patrick, U-2, Guiness beer, James Joyce, Cliffs of Moher.
[url]http://en.wikipedia.org/wiki/Ireland[/url] ([url]http://en.wikipedia.org/wiki/Ireland[/url])


It is obvious - I merely thought that is better to be in UK than in Ireland, thus, it may be cheaper to be in Northern Ireland than in London... But, I apologize for my bad explaining what I thought about Ireland... It is meant to be Northern Ireland!
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: madelaide on June 03, 2009, 10:28
I know! : D  i explained that too.... and also the fact that the british passport doesnt even have an address...

I didn't know there were addresses in passports.  Ours don't.  What if a person changes address, does he need a new passport?
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: luceluceluce on June 03, 2009, 14:50
I know! : D  i explained that too.... and also the fact that the british passport doesnt even have an address...

I didn't know there were addresses in passports.  Ours don't.  What if a person changes address, does he need a new passport?

yeah, i never really got that about foreign passports. My theory is is that they don't change home as much as the Brits.... but my own theory doesn't even convince me : )

Don't worry, i think this is only a problem in a different context. E.g. incorporating a company in India, where you need to supply photo id with proof of residence. I don't have a driving licence, and the UK doesn't have ID cards.... soooooo big pain in vast bottom.

I don't think it's a problem here. But check the country specific thread on ss for a more informed view...
x
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Adeptris on June 04, 2009, 00:53
Double indemnity taxation - I live in the UK, so if I do nothing, it will be 0% withheld as that is the current tax agreement. It is up to me to declare income in the UK earned overseas. You don't pay tax on income twice. (US/UK).
Oldhand

If you do nothing then the US will stop the 30% withholding tax, if you fill out the paperwork then they will stop 0% and you need to declare the earning in the UK, these are your choices.

Not sure how this works in Croatia, but in the UK you can also ask to offset any witholding tax when you submit your accounts, if you feel you are off the radar and not declaring stock earnings to your tax office then your choices are to declare and fill out the forms, or swallow the 30% loss.

David
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Jasenka on June 04, 2009, 08:00
...
Not sure how this works in Croatia, but in the UK you can also ask to offset any witholding tax when you submit your accounts, if you feel you are off the radar and not declaring stock earnings to your tax office then your choices are to declare and fill out the forms, or swallow the 30% loss.

David

In Croatia it doesn't metter if you fill out the forms or not, IRS will take 30%, since we don't have tax treaty with USA. And beside that I DO declare my stock earning to my tax office and pay my taxes on such earnings.

Jasenka
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: madelaide on June 04, 2009, 11:48
Jasenka,

Check if in Croatia it is like in Brazil, at least what I understand:  the taxable income in only the net value received from the USA company.
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Jasenka on June 05, 2009, 02:10
Jasenka,

Check if in Croatia it is like in Brazil, at least what I understand:  the taxable income in only the net value received from the USA company.

Thank you Madelaide for your suggestion :)

For sure I'll go next week in our tax institution for a long meeting to go through all the questions that have arisen.

Best regards,

Jasenka
Title: Re: IRS Withholding Taxes for non U.S. Submitters
Post by: Mormegil on June 05, 2009, 15:10
This may have been mentioned, as I skipped 10 pages of comments.

From a pragmatic point of view for people pulling their ports, isn't 70% of income more than 100% of no income?



On the WWII tangent, I'd say two of the biggest contributors to winning the war was the Soviet Union's manpower (or should I say personpower, as they had women serving too) and industrial capacity, and the USA's industrial and agricultural capacity.  It also helped that Hitler decided to attack the USSR, against their peace treaty - opening up the Eastern front and soaking up Axis resources.

I can definately say with the USA's invovlment, I'd probably be living (if I would even have been born) in the Philippines under Japan's East Co-Prosperity Sphere cursing my Japanese colonizers instead of being in California driving a Toyota Prius.