Non-U.S. Content & Rights Holders: claiming tax treaty benefits to avoid U.S. 30% withholding tax

Summary: this is a simple overview of how U.S. tax law affects payment of your film's royalties.

This is not intended as tax advice and you should seek more specific advice from a tax advisor in your country.

If you are a content owner with a film generating revenue via U.S. video-on-demand (VOD) outlets, and you are domiciled (living) outside of the United States, your royalty revenue is subject to U.S. withholding tax of 30%.

The United States has tax treaties with most countries that allow content owners who are domiciled (living) outside of the U.S. to reduce or (generally) avoid the 30% withholding tax.

You have two options:

1. Do nothing, in which case Kinonation is legally obligated to withhold 30% of your film's royalties as U.S. tax and pay this to the U.S. Internal Revenue Service (IRS.) For some content owners having withholding taken out may make sense; for example, if your film is not generating large royalty revenues, the money withheld may not be sufficient to go to through the process of filing U.S. taxes

OR:

2. File form W-8BEN Certificate of Foreign Status of Beneficial Owner for U.S. Tax Withholding (for non-US individuals) or W-8BEN-E (for non-US entities or companies).

Important: both forms require you to have either a U.S. Taxpayer Identification Number (ITIN) or a foreign tax identification number (foreign TIN)

A. For non-US individualsInstructions for Form W-8BEN  We recommend that you read and understand these instructions, paying particular attention to the instructions for Line 5, as follows:

"To claim certain treaty benefits, you must complete line 5 by submitting an SSN or ITIN, or line 6 by providing a foreign tax identification number (foreign TIN)."

You must have a Tax ID number from your country of domicile in order to claim tax treaty benefits and avoid or reduce U.S. withholding tax

B. For non-US entities or companies -- Instructions for Form W-8BEN-E  We recommend that you read and understand these instructions, paying particular attention to the instructions for Line 8, as follows:

"You must provide a U.S. TIN if you are: Claiming benefits under an income tax treaty and have not provided a foreign TIN on line 9b."

You can apply for a U.S. Taxpayer Identification Number (ITIN) only if you do NOT already have a foreign tax identification number (foreign TIN)

The application process for U.S. Taxpayer Identification Number (ITIN) is as follows:

 

 

Have more questions? Submit a request

0 Comments

Please sign in to leave a comment.