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Author Topic: IRS Withholding Taxes for non U.S. Submitters  (Read 84839 times)

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alias

« Reply #225 on: May 29, 2009, 18:17 »
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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.


alias

« Reply #226 on: May 29, 2009, 18:18 »
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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
« Last Edit: May 29, 2009, 18:27 by alias »

digiology

« Reply #227 on: May 29, 2009, 18:20 »
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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 Shutterstocks 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

« Reply #228 on: May 29, 2009, 18:42 »
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" Shutterstock will withhold taxes on U.S. Source Income only" So the 30% off doesnt exist anymore for foreign contributors outside Us?   for some its still around 10% though.   Is this correct? 

« Reply #229 on: May 29, 2009, 19:05 »
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[
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.

« Reply #230 on: May 29, 2009, 19:06 »
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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.

digiology

« Reply #231 on: May 29, 2009, 19:11 »
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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

« Reply #232 on: May 29, 2009, 19:48 »
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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).

« Reply #233 on: May 30, 2009, 01:51 »
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..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 :)

« Reply #234 on: May 30, 2009, 01:54 »
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Maybe there will be another opt out button! sell/don't sell US residents.... then we'll get hit with discrimination  :-\


« Reply #235 on: May 30, 2009, 02:33 »
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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.

« Reply #236 on: May 30, 2009, 03:23 »
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Will Getty do the same one day?

As much as I know they already do it for a long time...

« Reply #237 on: May 30, 2009, 03:28 »
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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. 
« Last Edit: May 30, 2009, 03:42 by Magnum »

« Reply #238 on: May 30, 2009, 05:33 »
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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%?

« Reply #239 on: May 30, 2009, 08:31 »
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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 theres still problems.   Theres quite alot of US buyers I guess.

Lets hope we get a good explanation soon, from their consultants.

« Reply #240 on: May 30, 2009, 08:46 »
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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.

 

« Reply #241 on: May 30, 2009, 08:49 »
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Non US contributors are great majority of all contributors. 


« Reply #242 on: May 30, 2009, 09:00 »
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so?

more important thing is how many NON-US buyers are there.

« Reply #243 on: May 30, 2009, 10:15 »
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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. 

« Reply #244 on: May 30, 2009, 10:49 »
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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.

« Reply #245 on: May 30, 2009, 11:38 »
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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.

« Reply #246 on: May 30, 2009, 13:12 »
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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.

« Reply #247 on: May 30, 2009, 13:40 »
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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.

« Reply #248 on: May 30, 2009, 13:53 »
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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.

« Reply #249 on: May 30, 2009, 18:12 »
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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.


 

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