Important Changes for Non-US Authors/Affiliates/Service Providers

Why it is necessary to write my foreign tax id? May be I misunderstood something, but in official instruction (this one - https://www.irs.gov/pub/irs-pdf/iw8ben.pdf) for W8-BEN form is written that I can write my date of birth in 8th line instead of writing my tax id at 6th line.

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I’am also an author on other marketplace which also was requiring from me W8-BEN form and there I didn’t provided my tax id and had no problem with it.

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I’m confused again, @collis

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If I choose not to provide a Tax ID Number, does that mean that you will withhold 30% of US sales regardless of where the author lives?

EDIT: I got an answer, no need to answer this anymore.

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@collis , this should be a way to “solve” this situation:

Earnings about a $100 item from starting authors

Before:
$100-50% commission = $50

Envato’s new calculation

$100 - 20%(buyer fee) = $ 80
30% US tax = $ 56
$56 - 50% commission = $28

My proposal

$100 - buyer fee and commission = $ 50
$50(author earning) - 30% US tax = $35

Not nice, but should be less harmful to many authors.

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@collis @natman Hello, there must be something wrong with the information you’re getting on the foreign tax ID number. I called the IRS yesterday and to them it was clear that the field must be left blank if I live in a country that does have a tax treaty (France in my case, 0%) AND does not deliver foreign tax identification numbers to their citizens. I quote the IRS :

“If your are providing this Form W-8BEN to document yourself with respect to a financial account that your hold at a US office of a financial institution, provide the tax identifiying number (TIN) issued to you by your jurisdiction of tax residence unless : you have not been issued a TIN OR the jurisdiction does not issue TINs. If your have not provided your jurisdiction of residence on line 6, provide your date of birth in line 8.”

We do have a tax treaty, we do not have to see these 30% held, and we do not have to ask for an ITIN because the “not provided” case is clear : no TIN + tax treaty = blank.

The W-8BEN is a personal declaration that I live in a certain country. It is based on honor in order to claim a tax treaty benefit. It is never written in the W8-BEN instructions that I have to ask for an ITIN if my country does not issue a TIN, it is written to leave the space blank.

In short, the TIN or ITIN or EIN (for companies) is NOT required to claim a tax treaty benefit. This is the job of the W8 form.

If you withhold 30% it means you consider that I did not filled the W8. So you’re not applying the IRS rules correctly when you state that “not provided” for the TIN = 30% held.

Further information found on the IRS website : in order to be able to ask for an ITIN, we must be able to produce some documents, including :

“Your original, valid tax return(s) for which the ITIN is needed. Attach Form W-7 to the front of your tax return. If you are applying for more than one ITIN for the same tax return (such as for a spouse or dependent(s)), attach all Forms W-7 to the same tax return. After your Form W-7 has been processed, the IRS will assign an ITIN to the return and process the return.”

If your persist to ask for an ITIN (once again, not necessary for us to claim our tax treaty benefit, which is the purpose of the W8 form), are you able to provide us with this document within days so that we are compliant on january first?

Thanks for reading this!

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^^^^^ Would be great to hear about this too.
If our country has a treaty with USA, and İF we are already withdrawing the country we are stated on the form ; it should be all ok.

Yes.

That’s explained here…

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But surely 99% of countries DO issue some kind of tax identifying number? Not having a tax number isn’t quite the same as your country not delivering tax identification numbers to their citizens.

i think both is wrong,

it must like this in case of new exclusive author (20% buyers fee and 37.5% author fee)
$100 - 20%(buyer fee[$20]) = $80
$80 - 30% (tax[$24] = $56
$56 - 37.5% (author fee from the 80%[$30]) = $26 (final revenue)

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The problem is not the “tax number”, but wether it is used as an ID or not. In France we do have tax numbers, but they are not considered as IDs (it’s clearly explained on the european commission website). IDs in France are the Name, date of birth etc…
I used to sell apps on the App Store, I had to fill the W8 for two accounts, left the field blank and never had a 30% retention… and I doubt that everyone who’s selling stuff in the US via a US office goes to the tax office every year to claim their money back.

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Hi @ouss1 , i think author fee in starting is 37,5%, instead of 30%. Am i wrong?

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(post withdrawn by author, will be automatically deleted in 24 hours unless flagged)

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you right i fix it, sorry it’s long time i am not see this percentage :wink:

Maybe this is a very stupid question, but…

What stops me from choosing a country of residence that has a 0% rate of withholding in the form from user settings (tax information) ? Yeah, there will be false information, but…

Withdrawals will only be processed to the nominated account holder payment details and the country must match the one on the completed W-8 or W-9 form.

When I withdraw money via PayPal or Payoneer, how do you know the country of my residence?

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Probably nothing at the moment, but if something hapends down the road & the IRS requests their books for some reason, and you turn out to be selecting the wrong country, I blieve that is called “Tax Evasion”, which leads to serving time in prison + hefty fine :slight_smile:

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I have never entered any information about me, country of residence, name etc, how do they know that I am actually from Uganda or Belize?

Im no lawyer nor a tracking expert, but im pretty sure they can find you if they want to :slight_smile:

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Simply require to send scan of your ID :slight_smile:

A small question: I’m in a country with no treaty so I’ll lose the 30%. The original announcement said if I don’t fill the forms I’ll be treated as US-resident who didn’t fill the form and will be applied a Backup Withholding of 28% instead. So is it cheaper for me to not fill the W8?

it’ll be 28% for all sales in this case. So it’s either 30% for us only or 28% for all :))

If you don’t submit the W8 form, you’ll be considered US citizen & 28% will be applied to every sale you make, whether the buyer is from the US or somewhere else, if you fill the form, even if your country doesn’t have a treaty with the US, you will be quoted 30% on US sales ONLY !