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'...

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!

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  

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.

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.

Quote from: Milinz on June 02, 2009, 09:28

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!

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.

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?

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.

Quote from: Milinz on June 02, 2009, 10:04

...
...
...

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.

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

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?