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

Thanks for answering. You are right about this but I still had hope about this subject so I sent my question to support and this was the answer I received (I just want to be absolutely sure about all of this)

“Unfortunately we have to apply the 30% tax rate due to the lack of a treaty. The TIN is required for authors that are from a treaty country and we need this to be able to apply the applicable tax rate as per their country’s treaty.”

Really bad news for a lot of authors… :pensive:

Do we need to provide a foreign tax id number to get a tax treaty ? or is it enough that we live in a country that has a tax treaty ?

In order for the tax treaty to be applied, you have to provide a Foreign Tax ID number.

If for some reason, you do not have an FTIN, or if your country does not provide one, then you have to apply for an ITIN by completing the W7 form and send it to the IRS office in Austin (process takes between six and eleven weeks!!).

Basically there are 3 possibilities:

1) You don’t do anything:
The IRS will assume you are an American taxpayer that has not done a proper declaration and they will retain 28% on all your sales.

2) You complete the W8 form but you do not provide a FTIN/ITIN and/or your country does not have a tax treaty:
The IRS will retain 30% of your US sales

3) You complete the W8 with a valid TIN and your country does have a tax treaty:
The IRS leaves you alone, yay!!

4 Likes

Sorry to be pedantic, but it’s 28% of all sales if you do nothing, and if “You complete the W8 with a valid TIN and your country does have a tax treaty” then the IRS might leave you alone, they might not. It depends on the rate of the tax treaty. In France its 0%, so you’re all good. If you’re in India or Egypt, for example, it’s 15%.

Otherwise, all very sound advice from the purple frog!

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Right, sorry about that.

I’m no frog though! :wink:

For Romanian authors: which one do I use?

my CIF of my PFA (Cod Identificare Fiscala) -> financial code
or
my CNP (Cod Numeric Personal) -> unique personal code in Romania

People in another thread said that CNP is fine, I just wanted to be sure.

1 Like

Here is the official European documentation on TINs for Romania.

Oops, not had enough coffee for my eyes to work yet. Sorry!

I have to say that for a long time I thought your name was PurpleFrog, too! That is until someone pointed it out a while back.

I guess I read it as “Frog” the first time and never gave it a second thought! :stuck_out_tongue:

Everyone thinks it’s Frog, my mom, my girlfriend, my friends, almost everyone I interacted with on these forums,… Even Google asks me “do you mean purple frog?”

I have seriously considered changing it to PurpleFrog. With a cool a logo and everything…

Sorry for the digression.

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@Flowsopher Hi, thanks for the good wishes. Do you pay any other taxes for your sales on Envato? I have a good friend in Netherlands and I’m thinking of giving them the ownership of my account.

AASMusicWorks, what is your experience on Envato. Did you have to pay any taxes in Netherlands before this? I’m asking because I’m thinking of transfering my account to my good friend in the Netherlands to avoid this steal from uncle Sam.

In the Netherlands we also pay taxes (unfortunately). And really a lot :imp:
What I understand from this new thing is that de percentage is deducted if there’s no treaty with the domestic country. If there’s a treaty then it’s assured that the author doesn’t have to pay double taxes and pays in his/her own country.

You can’t sell, transfer, or give away your account unfortunately. You can sell or give away your items though, as long as they’re no longer listed on the site.

OK so I am confused here. I am a Canadian resident, apparently there will be 0% with held but on the form it says “Foreign tax identifying number” from researching online it seems I can use my personal canadian tax number, but after speaking with someone he said I need to apply to the IRS for a “US ITIN (US tax identification number) or a US social security number” could you shed some light on this please.

Thanks,
Matt

ANY OTHER CANADIANS HERE?

@collis so I am confused here. I am a Canadian resident, apparently there will be 0% with held but on the form it says “Foreign tax identifying number” from researching online it seems I can use my personal canadian tax number, but after speaking with someone he said I need to apply to the IRS for a “US ITIN (US tax identification number) or a US social security number” could you shed some light on this please.

Thanks,
Matt

did you ever figure this one?

Did you guys ever figure this out, im In canada as well and trying to figure out the best way of doing this, personally or under my Canadian corp?

Yes, we wasted a day and a half on the phone with the US government and IRS and finally got it all sorted out. The first thing they don’t tell you is that you have to register with the US government and get an EIN (Employer Identification Number) for your corporation: https://www.irs.gov/pub/irs-pdf/fss4.pdf

After that is done and your number is issued you can proceed to fill out the -E corporate version of the W-8BEN (W-8BEN-E) and put your shiny new EIN # under section 8 of Part 1 (TIN #): https://www.irs.gov/pub/irs-pdf/fw8bene.pdf

You will also need to check off Part 1 Section 4 (Corporation) and Section 5 (Active NFFE. Complete Part XXV) and Part 3 14a & 14b, and state in section 15 “VII” and “0%” and “Business” and “Beneficial owner is a resident of Canada who has no permanent establishment in the USA”. The IRS is actually quite helpful (unlike Envato) when it comes to figuring it all out, you can actually call and spend hours with some poor government worker who will help you limp through it all step-by-step.

The only good news is there should be no US Royalty Withholding Tax applied.

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Hello,

I am still waiting my ITIN. I still have to fill the ENVATO W8 form without ITIN or not?
If i receive my ITIN after 1st january 2016, what is the process to fill the ENVATO W8 Form if I have already completed without the ITIN ?

Thanks