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Post by Ted on Apr 23, 2013 20:12:27 GMT -8
Smashwords has made it easier for authors to attain the ITIN letter from Smashwords. Now, you can simply download the letter. Fill out a couple details, click print, and you've got your letter. You'll find the link in the ITIN Checklist in the FAQ here. Here's the direct link (opens as a PDF): resources.smashwords.com/forms/itin-request.pdf Just fill out the form, print it out, and you're that much closer to getting the tax treaty benefit you deserve. Don't forget to follow the checklist in the FAQ! In the past, you had to wait until your Smashwords account had an accrued balance of $10 before you could contact them and request a signed ITIN request letter on Smashwords letterhead, which they would then sign and mail you. Now, you can simply download the letter. |
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Post by David Ellis on Apr 24, 2013 21:34:04 GMT -8
Forgive my ignorance. What is an ITIN letter?
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Post by Ted on Apr 25, 2013 1:53:56 GMT -8
Forgive my ignorance. What is an ITIN letter? An ITIN is the U.S. IRS-issued tax identification number. If you reside outside the US, your Smashwords earnings are subject to a 30% tax withholding, mandated by the United States Internal Revenue Service (IRS). Countries that have special tax treaties with the US, and these tax treaties can allow you to claim full or partial exemptions from tax withholding, depending on the country. Some tax treaty countries are: United Kingdom - 0%; Canada - 0%; Australia - 5%; New Zealand - 10%; India - 15%; South Africa - 0%;Germany - 0%. To find out more about tax and the IRS read the FAQ's on your Dashboard: "Are there tax withholdings on my earnings if I reside outside the United States?" |
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serbanvcenache
SWF Writers
Posts: 712 
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Post by serbanvcenache on Apr 26, 2013 14:19:32 GMT -8
Interesting development. Lowered bureaucracy is always great news. I have a question, though. If one agrees to let Smashwords pay the afferent tax to the IRS, does that foreign author have to pay taxes in his country as well?
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Post by Ted on Apr 26, 2013 18:10:50 GMT -8
Interesting development. Lowered bureaucracy is always great news. I have a question, though. If one agrees to let Smashwords pay the afferent tax to the IRS, does that foreign author have to pay taxes in his country as well? Yup. As far as I know a resident taxpayer is liable for any tax determined on income. Royalties are income, therefor taxes are due. |
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serbanvcenache
SWF Writers
Posts: 712
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Post by serbanvcenache on Apr 27, 2013 0:52:24 GMT -8
Interesting development. Lowered bureaucracy is always great news. I have a question, though. If one agrees to let Smashwords pay the afferent tax to the IRS, does that foreign author have to pay taxes in his country as well? Yup. As far as I know a resident taxpayer is liable for any tax determined on income. Royalties are income, therefor taxes are due. But that is double taxation. Suppose you live in Romania or Moldovia and you're a SW author earning some money. You pay taxes on that revenue to the american IRS. SW sends you a receipt. The author would show that receipt to the fiscal authorities of his own country. Since his income is not generated in his respective country, but in the US, he's exempt from taxation a second time. If I go to the US on a green card and work there for a year or two, then come back in my home country, I'm not going to pay income tax on the money I earned abroad to my country's fiscal authorities. I already payed that once in the US. |
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Post by Ted on Apr 27, 2013 5:17:22 GMT -8
But that is double taxation. Suppose you live in Romania or Moldovia and you're a SW author earning some money. You pay taxes on that revenue to the american IRS. SW sends you a receipt. The author would show that receipt to the fiscal authorities of his own country. Since his income is not generated in his respective country, but in the US, he's exempt from taxation a second time. If I go to the US on a green card and work there for a year or two, then come back in my home country, I'm not going to pay income tax on the money I earned abroad to my country's fiscal authorities. I already payed that once in the US. That may work in Romania or Moldovia, but for me in Canada as we are taxed on world-wide income just like the US and many other countries. If you're country doesn't tax you on world-wide income, then you should talk with them about how to claim a credit for tax paid or else apply for the ITIN number from the IRS. That's why I filled out the ITIN letter and sent it to the IRS, so once all the paper work was completed - and I added the ITIN number I got back from the IRS to my Smashwords account information - Smashwords could release the IRS withholding funds. But then I'm taxed on world-wide income. I'm not an accountant and certainly am not offering tax advice, so you should check with your local tax authorities and see how foreign income and foreign taxes are handled in your country. |
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Post by galatea on Jun 14, 2013 2:42:20 GMT -8
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Post by galatea on Aug 2, 2013 8:38:11 GMT -8
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