Getting paid from USA (and taxation)

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Forums › Finance and wealth management › Getting paid from USA (and taxation)

BlueToothKiwi

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#68841 29-Sep-2010 11:45

One of my publisher in USA wants me to fill up one of those US withholding tax exemption certificates.

Does New Zealand have a tax treaty with USA?

After reading up about 'nonresident aliens', 'disregarded entity' and a 'reverse hybrid entity' I am just as confused. Why are American forms so complex? All I want to do is not pay TAX twice (once in US and once in NZ).

If you got experience with filling up a W-8BEN forms please PM me.

Tim M, Auckland
Blog: http://paddler.co.nz

freitasm

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#385800 29-Sep-2010 11:47

Yes, we do. I never paid any tax there, just filled the form declaring I am a foreigner, not based in the U.S.

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tchart

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#385814 29-Sep-2010 12:30

I sell Windows Mobile software on a few american portals. They changed the law a few years back that you had to fill out a W-8BEN or they with hold some tax (cant recall the exact figure, mightve been 10 or 20%).

I never bothered filing the form as each year they (should) send you an official looking piece of paper with the amount you earned and how much tax they with held. I then file this with my tax return as there is a section for overseas tax paid. You can do this becuase of the tax treaty.

I just think of it as a forced tax savings plan!

BlueToothKiwi

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#385893 29-Sep-2010 15:05

Thanks Mauricio and Tchart for the response...

tchart: (cant recall the exact figure, mightve been 10 or 20%).

30%

tchart: I just think of it as a forced tax savings plan!

30%. Which in theory means you are better off paying tax in the USA even after next week's tax rate change for NZ!

Tim M, Auckland
Blog: http://paddler.co.nz

SamSamNintendoMan

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#391730 14-Oct-2010 11:46

Don't you have to pay twice? like once in the states and then when you get it here as well???

graemeh

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#391743 14-Oct-2010 11:57

BlueToothKiwi: Thanks Mauricio and Tchart for the response...

tchart: (cant recall the exact figure, mightve been 10 or 20%).

30%

tchart: I just think of it as a forced tax savings plan!

30%. Which in theory means you are better off paying tax in the USA even after next week's tax rate change for NZ!

No you're not.

The 30% tax paid in the US is credited towards your tax obligation in NZ, so if you're on any rate higher than 30% you have to pay the difference here.

SamSamNintendoMan

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#391750 14-Oct-2010 12:01

what about with businesses? can I sell things to people in teh US or is that a whole new kettle of fish?

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Kyanar

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#391924 14-Oct-2010 18:53

SamSamNintendoMan: what about with businesses? can I sell things to people in teh US or is that a whole new kettle of fish?

Yes, without any problems at all. You won't have to pay GST. However, you will have to declare and pay the Business Income Tax on the profits.

graemeh

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#392094 15-Oct-2010 09:19

Kyanar:
SamSamNintendoMan: what about with businesses? can I sell things to people in teh US or is that a whole new kettle of fish?

Yes, without any problems at all. You won't have to pay GST. However, you will have to declare and pay the Business Income Tax on the profits.

Well to be completely picky you do have to pay GST, you don't have to charge your client GST. You may still have to register for GST if you sell over $60k per year. If you do register for GST you can claim the GST you paid on things you bought here for your business so you'll probably get refunds each time you do a return :)

Kyanar

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#392225 15-Oct-2010 13:38

graemeh:
Kyanar:
SamSamNintendoMan: what about with businesses? can I sell things to people in teh US or is that a whole new kettle of fish?

Yes, without any problems at all. You won't have to pay GST. However, you will have to declare and pay the Business Income Tax on the profits.

Well to be completely picky you do have to pay GST, you don't have to charge your client GST. You may still have to register for GST if you sell over $60k per year. If you do register for GST you can claim the GST you paid on things you bought here for your business so you'll probably get refunds each time you do a return :)

Well, no, you don't pay GST on sales to overseas entities. Where did you get the idea that you did?

graemeh

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#392233 15-Oct-2010 13:46

Kyanar:
graemeh:
Kyanar:
SamSamNintendoMan: what about with businesses? can I sell things to people in teh US or is that a whole new kettle of fish?

Yes, without any problems at all. You won't have to pay GST. However, you will have to declare and pay the Business Income Tax on the profits.

Well to be completely picky you do have to pay GST, you don't have to charge your client GST. You may still have to register for GST if you sell over $60k per year. If you do register for GST you can claim the GST you paid on things you bought here for your business so you'll probably get refunds each time you do a return :)

Well, no, you don't pay GST on sales to overseas entities. Where did you get the idea that you did?

A business does not PAY GST on sales, they CHARGE GST on sales.