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Author Topic: IRS Withholding Taxes for non U.S. Submitters  (Read 96646 times)

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« Reply #50 on: May 28, 2009, 01:14 »
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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.


« Reply #51 on: May 28, 2009, 01:43 »
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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.

« Reply #52 on: May 28, 2009, 02:03 »
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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?!

« Reply #53 on: May 28, 2009, 02:05 »
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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...


« Reply #54 on: May 28, 2009, 02:08 »
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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

« Reply #55 on: May 28, 2009, 02:09 »
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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!
« Last Edit: May 28, 2009, 02:11 by leaf »

« Reply #56 on: May 28, 2009, 02:13 »
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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:

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

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.

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

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

« Reply #57 on: May 28, 2009, 02:21 »
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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

« Reply #58 on: May 28, 2009, 02:43 »
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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.
« Last Edit: May 28, 2009, 02:45 by cidepix »

« Reply #59 on: May 28, 2009, 02:48 »
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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.

« Reply #60 on: May 28, 2009, 02:54 »
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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.

Caz

« Reply #61 on: May 28, 2009, 02:56 »
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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.

« Reply #62 on: May 28, 2009, 03:05 »
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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.

« Reply #63 on: May 28, 2009, 03:16 »
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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."

« Reply #64 on: May 28, 2009, 03:26 »
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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?
« Last Edit: May 28, 2009, 03:42 by borg »

« Reply #65 on: May 28, 2009, 03:42 »
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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.

« Reply #66 on: May 28, 2009, 04:38 »
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One other agencie that is base in US only ask me for the W-8BEN form.
I dont 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. In not employe of SS!!!


« Reply #67 on: May 28, 2009, 04:45 »
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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?!


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

« Reply #68 on: May 28, 2009, 05:03 »
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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

and the sign-ins:
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
« Last Edit: May 28, 2009, 05:21 by miskolin »

« Reply #69 on: May 28, 2009, 05:06 »
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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!

« Reply #70 on: May 28, 2009, 05:10 »
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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.

« Reply #71 on: May 28, 2009, 05:15 »
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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.

« Reply #72 on: May 28, 2009, 05:24 »
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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 :)
« Last Edit: May 28, 2009, 05:26 by MikLav »

« Reply #73 on: May 28, 2009, 05:30 »
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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 ...

« Reply #74 on: May 28, 2009, 05:46 »
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On the positive side, this might eliminate many of the fake subscribers that contribute stolen materials.


 

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