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- This topic has 6 replies, 3 voices, and was last updated 10 years, 3 months ago by Tucker.
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TuckerGuest
Hi,
I am complete NEWBIE at this and I would really appreciate anyone’s advice.
I am based in the UK and have had tracks accepted by a company in the US.
According to the deal the company are taking 65% on ant tracks sold. They have also sent me a W-8BEN tax form that states I will also be charged 30% tax on anything.
Just checking but is it correct that I will only see 5%?
Is the tax figure correct?EdouardoParticipantNo, you will be taxed on what you receive not on what the customer pays for the licence.
For a sale of 100 US$, you will receive 35$ on which you will be taxed 30%, that is 10.5$. In the end you get: 24.5$, i.e. 24.5%.
65% for the library is a pretty rough deal for the composer… I think I have come across this one when investigating libraries: that number just made me zap it without further consideration.
TuckerGuestThanks for your quick reply. Very much appreciated.
TboneParticipantWoooo hold on there.
ALL THE BELOW IS JUST MY LAYMAN’S EXPERIENCE
Tucker, you are UK based and apparently there is a treaty with the US to avoid the US’s “withholding tax” (not sure it is 30% for UK, might be 20%). You need to get an ITIN from the IRS, which you can do by filling in a form, and sending that with a notarized copy of your passport to the IRS. The easiest way to do this is at the IRS office in the US embassy in London – they will help you a lot and also notarize your passport for free. Not many people know this. I got my ITIN exactly this way.
I think you can also set up a corp and get an EIN. Up to you. Either way, you absolutely do not have to pay that tax, assuming it’s withholding tax. That’s what I was told.
TuckerGuestHi Tbone,
Thanks for the information. I have looked in to this and as part of my submission to the IRS I will need a letter from the company dealing with my music stating I am not a US citizen and am working for them.
Did you have to do this also?Thanks
TboneParticipantYes I did. And I had to make sure it said specifically something to do with royalties which I can’t remember. Ask the IRS for the correct wording. I got it wrong the first time and had to reapply.
TuckerParticipantHi again,
Thanks very much Tbone for your help with this. I am currently progressing this including a trip to London to hand in my documents.
Once again thanks very much for pointing this out to me. -
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