Double taxation issue- help needed!

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Double taxation issue- help needed!

Post by sonny123 » Fri May 02, 2008 11:48 pm

Help needed, anyone knows a solution to this?

My latest project has run into difficulties, with the IRS withholding 30% of my advance, even though I'm not a US resident and live in Singapore.

The reason for this is it seems that by default any creator from outside the US who does work for a US company is supposed to have 30% of his/her royalties withheld by the IRS. Its Double Taxation issue since I will also be taxed on my earning in Singapore.

The easiest way to avoid this if the country the creator lives in has a Double Taxation Agreement with the USA. Many countries have one (like France, Japan, UK, Australia) that results in 0% withholding, whilst others (like the Philippines and Italy) have reduced withholding. So you fill in a W8BEN form and get a partial or total waiver of the withholding.

Unfortunately Singapore and Malaysia are amongst a relatively small group of countries who do *not* however have a DTA with US. The full list of DTAs can be found here:

- So I'm trying to figure out how I can get my money back from the IRS.

-There seem to be two possible solutions, but with the IRS itself being unhelpful with advice, we aren't quite sure how valid either of them are:

(1) Apply for an interview with the IRS, stating that I am a tax-paying resident of another country and therefore requesting a waiver of the withholding. As yet it is unclear whether this is possible, or what the criteria for the IRS's decision would be even if it is.

(2) Work out a work-for-hire contract rather than one based on Advances ; we've been told this is one reason why my previous projects where I had to submit a W8BEN form have not been taxed. But again its not clear how true this is from the responses we've gotten from the IRS.

Well that's the issue right now, any more information or advice would be greatly appreciated! :)

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Post by jdalton » Mon May 05, 2008 8:08 pm

I don't know anything about Singapore, but I did live and work in Taiwan for a while (which doesn't have any tax treaties with my native Canada). Despite the lack of treaties, I was able to still declare the tax I'd paid on the work I did in Taiwan on my Canadian income tax- which meant that any tax I paid in Taiwan I was exempted from paying in Canada. Unfortunately, Canadian taxes are far higher than Taiwanese taxes, so I still had to pay a lot of Canadian tax- but no more than I would have had to pay if I'd earned the money in Canada.

Then later I got myself declared a non-resident of Canada for that time period and got all that money back. :-)

Of course that doesn't help you much if Singapore's taxes are lower than the U.S., or if you don't have the paperwork to prove to the Singaporean government that you've paid tax in the U.S., or if Singapore's tax forms don't allow you to declare foreign tax payments on your income tax. Sorry.
Jonathon Dalton
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