I am not US resident, and each time my project get the sale to US people I got only the half fee which Envato subtracted due to the US Royalty Withholding Tax why this process come to me, and how do I solve this problem? on a side note, I am living in Saudi Arabia
Hi @afmotion
@AlekseyZhdanov
I tried, but I couldn’t get the idea how to fill up this form because the asked me to provide some stuff that I don’t have it such as Tax ID number
You should have a tax number (TIN):
TIN is issued by the General Authority for Zakat and Tax (GAZT) to all taxpayers and withholding entities ( such as government ministries, agencies and departments). GAZT is the Saudi Arabian tax administration . TIN is issued once to a taxpayer; it remains valid as long as the taxpayer is in operation.
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Can u please guide me how could I know my own Tax number and from where i can get it.
Frequently Asked Questions
Hi @afmotion
If you’re not sure what is the right number in your country, talk to a tax advisor or accountant. You may need to apply to your country’s government or tax authority.
It makes no difference if you provide your TAX ID or not because Saudi Arabia has no tax treaty with the USA.
In your case:
- W-8 form with or without Tax ID = 30% US Royalty Withholding Tax only on US sales
- No W-8 form = 28% US Backup Withholding Tax on all sales
@Sealord
Is tax ID depend on where you living or where are you from ??
Where you’re responsible for paying tax, which is usually where you are living… not where you are from. There are a few exceptions though.
@SpaceStockFootage
What if I am living temporarily for studying in-country does not have a treaty with the US and I still have my own Tax ID. It does that mean I have to pay tax until I come back to my country
No, tax is payable at the time when tax should be applied. Yes, if you do an annual tax return then that may mean you’re not physically paying anything for up to a year later, but that tax is still owed/generated/created at the point of sale/earning/buying etc.
In the case of withholding tax… it’s taken at the point of sale (I.e. immediately), so your circumstances at the time dictate what is owed and how much is paid. And the tax laws of the country you live in and the country you are visiting dictate whether you can/or have to pay tax in your original country, or the country you’re currently in.
In a lot of cases, if you spend less than six months of the tax year in the new country, then you can continue to pay tax in your original country. That covers things like holidays… nobody wants to sign up to some new tax system if they happen to make a sale while they’re on a two week trip to the beaches of Florida, for example. Or if they change flights in two different countries on the way, and have to fill out two different tax returns for the one sale you might have made while waiting to get on the next plane.
It’s different if you have a physical job in this new country though… if you’re going to work at the 7-11 in Miami then you’ll be expected to pay tax in the US, whether you’re doing so for over six months or not. And if you sell some items here while you’re doing your stint at the 7-11, you may as well pay the tax for those to the US as well. Or use your US tax details in your account settings so the appropriate tax is applied.
Bottom line… speak to a tax advisor. My advice is just ‘this is what usually happens in a lot of cases’ but may not apply to you. It does depend where you are from, where you are living, how long you’ve been there, how long you’re going to be there for, and whether you’re physically employed by anyone in the country you’re visiting.