Posts Tagged ‘tax’

An update about Shutterstock and the tax issue

Tuesday, June 9th, 2009

Shutterstock has still not issued an update about the tax issue I wrote about in the previous post. But I wrote to them and asked if it was okay to use an EIN number (Employeee Identification Number) instead of an ITIN number when we fill in form W-8BEN. I received the answer that it is okay to use an EIN (and also a SSN) instead of an ITIN when you fill in the form. So this is good news for those of us with our own companies since it’s much easier to get an EIN than an ITIN.

As I wrote in the previous post this is what you do to get an EIN number:
1. Start by looking trough form SS-4. It might be a good idea to print it out and fill it in so that you are really prepared,
2. Call the IRS in the USA, telephone number +1-215-516-6999. You will then have to answer some questions that you have answered on form SS-4.
3. At the end of the call you receive your EIN number. It is also sent home to you through regular mail. You then use this number when you fill in form W-8BEN.

I haven’t made the call to get the number myself yet but I will do it some time soon.

Hysteria on Shutterstock!

Monday, June 1st, 2009

The last couple of days there have been hysteria on Shutterstock. This is because Shutterstock sent out an e-mail on May 27, telling all non-US submitters that they have to apply for an ITIN number (Individual Taxpayer Identification Number) at the American IRS and fill in a W-8BEN form. If we don’t do that, we have to pay 30% tax on our income – to the USA. Then we have to pay more taxes in our own country! But if we apply for this ITIN number and fill in the W-8BEN form we don’t have to pay any tax at all to the USA – if we are lucky. It all depends on which country you live in. I’m lucky to live in Sweden which has an income tax treaty with the US and I don’t have to pay any tax at all. But some countries have to pay between 5-30% even if they have a tax treaty.

On Saturday Shutterstock sent out an update regarding this issue. First of all they will only withhold tax on the images that gets bought by American buyers. So if only people outside the US buys your pictures you don’t have to pay any tax at all (regardless of if you have applied for an ITIN number or not). But it’s most likely a big portion of the buyers that are American but no one knows how many.

Secondly Shutterstock announced in their update that we can’t apply for an ITIN number yet because IRS needs a signed letter from Shutterstock that needs to be sent in with the application.

So right now we don’t have to do anything at all until Shutterstock gives us more information.

I’m hoping that there will be an easier way out of this for those of us that have our own companies. If you run a company you can apply for an EIN (Employeee Identification Number) instead of an ITIN. Then all you have to do is call the IRS at phone number +1-215-516-6999, and answer some simple questions. Just to be on the safe side you should read through the form SS-4 so that you know which questions you have to answer. But several people that have already made the call have said that they only had to give them their name and address but it doesn’t hurt to be prepared anyway! You get your EIN number at the end of the telephone call and it also gets mailed to you. You should then be able to use this EIN number instead of an ITIN number when you fill in the W-8BEN form.

But for now I will not do anything until Shutterstock gives us more information. Hopefully we will know more later this week…

If you want to discuss this issue in your own language there are several threads in the Shutterstock forum that are specific for different countries. You’ll find a list of all the country threads here!