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Thread: ITIN Number and W-8BEN (Applicable to foreign workers living outside of USA)

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    Default ITIN Number and W-8BEN (Applicable to foreign workers living outside of USA)

    Does anybody know if it is really necessary to get an ITIN number for the W-8BEN form? It seems ridiculous considering I'm not going to open a US bank account. Cams.com is asking for one, and I'm assuming that FWC will ask me as well since they've already contacted me for the W-8BEN form. I've searched on the forum for more information but it seems the threads are very old and I'm not going to resurrect them zombies.

    And, if I have to get a ITIN number, is there a faster way then sending it via snail mail to the IRS?
    Last edited by hyori; 11-18-2014 at 11:37 AM. Reason: i knows grammars
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    Default Re: ITIN Number and W-8BEN (Applicable to foreign workers living outside of USA)

    It, alas. Sadface. I faced that shit when I started self-pubbing on Amazon, and there was no way around it. Sooo, unless they changed things since 2011, tedious paperwork it is.

    ETA I was able to take my paperwork to the embassy in London, but have heard since that they don't always do that.


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    Default Re: ITIN Number and W-8BEN (Applicable to foreign workers living outside of USA)

    It, alas. Sadface. I faced that shit when I started self-pubbing on Amazon, and there was no way around it. Sooo, unless they changed things since 2011, tedious paperwork it is.
    While US residents can now apply for an ITIN online, to the best of my knowledge there's no way for foreign citizens to do that.

    However, there may now be more motivation than ever to go through the tedious paperwork. If you live in a country that is co-operating with FACTA, beginning in January you may need an ITIN after the fact to file a US non-resident tax return in order to get back ( some portion of ) the money that will begin to be withheld as 'estimated US taxes' due on US based income earned by 'foreign persons' . From


    (snip)Withholdable Payment

    FATCA imposes a 30% withholding tax on withholdable payments made to specified foreign persons. A withholdable payment is any payment of U.S.-source fixed or determinable, annual or periodical (FDAP) income, or gross proceeds from a sale or other disposition (occurring after December 31, 2016) of any U.S.-source interest or dividend producing property (even if there is no gain on the sale). Additionally, for purposes of FATCA, FDAP income includes any U.S.-sourced payment of interest, dividends, rents, salaries, wages, premiums, annuities, compensations, renumerations, emoluments, and other annual or periodic gains, profits, and income. Withholdable payments noted above fall under the FATCA requirements if they are made to either FFIs or NFFEs [ Non-Financial Foreign Entities - sic].

    FDAP income for purposes of the FATCA withholding rules often is the same as it is under the traditional withholding rules. This is not always the case, however. For example, under the FATCA rules, all interest paid by a U.S. borrower is U.S. source income regardless of how or where paid. Thus, FATCA withholding is required. In contrast, interest paid by foreign branches of U.S. taxpayers is not subject to traditional withholding because the interest is considered foreign source income.

    Payments of interest or gross proceeds under certain obligations are exempted from the FATCA withholding rules under grandfather provisions. Specifically, payments made under obligations outstanding on July 1, 2014 (recently extended from January 1, 2014) are excluded from the FATCA withholding rules. Any material modification to an obligation would cause it to lose its grandfathered status.

    Unless an exception applies, there is a presumption that a foreign person will be subjected to a 30% withholding rate on all withholdable payments unless the person identifies its substantial U.S. interest holders and their U.S. tax information, and payments to those persons are reported annually to the IRS. Without the proper documentation and reporting (or an exemption, discussed below), the withholding agent must withhold the full 30% on the payment, even if the beneficial owner of the payment would typically qualify for a reduced rate of withholding under an income tax treaty. In that instance, the beneficial owner would need to file a refund claim or claim a credit against U.S. taxes due in order to receive the treaty benefits.(snip)


    Applying for an ITIN, subsequently completing a W8-BEN form, and submitting the W8-BEN form to US 'payer' companies before January 1st 2015, certifies to the US 'payer' company / financial institution that the 'foreign person' qualifies for the 'Active Non-Financial Foreign Entity' exemption from FACTA withholding. So it's much better to apply for an ITIN and complete / submit W8-BEN forms before the 30% FACTA withholding actually kicks in on your US webcam host income ... thus putting you in a position of having to file a US non-resident tax return to get ( some portion of ) your withheld money refunded to you in 2016.

    It would also appear that you can complete and submit a W8-BEN form WITHOUT obtaining an ITIN, providing that 100% of your US source income will be paid to you without ever being routed through a US based account in your name. This would certainly include checks and international bank wire transfers to your home country bank account. See instructions for line 6
    Last edited by Melonie; 11-18-2014 at 01:53 PM.

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    Default Re: ITIN Number and W-8BEN (Applicable to foreign workers living outside of USA)

    Quote Originally Posted by

    It would also appear that you can complete and submit a W8-BEN form WITHOUT obtaining an ITIN, providing that 100% of your US source income will be paid to you without ever being routed through a US based account in your name. This would certainly include checks and international bank wire transfers to your home country bank account. See [url
    http://www.irs.gov/pub/irs-pdf/iw8ben.pdf[/url] instructions for line 6
    So, that means that if I only use bank wire and checks as a form of payment but not Payoneer/Paxum and the like, I can go without obtaining an ITIN? Paxum is actually a Canadian company and from what I gather their banks are not even in the US. Payoneer I'm not so sure...but Paxum and Payoneer are not really banks...
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    Default Re: ITIN Number and W-8BEN (Applicable to foreign workers living outside of USA)

    ^^^ well payoneer, paxum et al do 'use' banks to effect funds transfers. The question is whether those banks are US based, and whether a separate account needs to be established in your name. I'm pretty sure that you're correct about paxum's banking activities being based in Canada. And if I remember correctly, payoneer's banking activities are based in Belize. Also, if I'm understanding the FACTA process correctly, the 30% withholding will be performed by whatever US financial institution is located 'at the border' ... i.e. the point where your payment money will be transferred out of the USA. Thus it would appear, on the surface at least, that paxum or payoneer wouldn't be involved in the FACTA withholding process, and that the banks used by US webcam hosts would be responsible for FACTA withholding.

    There's one way to find out ... submit your W8-BEN without an ITIN and see if your US based webcam hosts ( and their US banks ) accept it !!!

    From a slightly different angle, it's also possible that with FACTA in full effect on January 1st, even if your US earnings are exempted from 30% withholding at the US border via filing a W8-BEN, that same W8-BEN personal info may be used to report your US earnings to your FACTA partner home country. I have no way of knowing whether or not a specific home country's tax agency has the mechanisms in place to later use that report of US based income to cross-check for 'foreign' income being declared on your home country tax return ... but it would be a fairly straightforward computer check.
    Last edited by Melonie; 11-19-2014 at 04:42 AM.

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    Default Re: ITIN Number and W-8BEN (Applicable to foreign workers living outside of USA)

    Is there any reason for me to do this form for SM? What exactly is it?

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    Default Re: ITIN Number and W-8BEN (Applicable to foreign workers living outside of USA)

    ^^^ that would depend on the location of the bank which is actually disbursing SM's payment funds to you. If that bank is in the US, then you'll need to complete a W8-BEN form to avoid 30% US estimated tax withholding. But if that bank is based in Cyprus or any other EU country, then SM's funds would never need to enter or exit the USA thus no chance of 30% US estimated tax withholding and no need for the W8-BEN form.

    The US W8-BEN form is basically A. a declaration that you are not a US citizen, B. that you are engaged in an 'active' business ( as opposed to 'passive' investment / royalty income ), and C. enough personal information being provided to allow the US IRS to ( potentially ) report your US based earnings to your home country's tax agency.

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    Default Re: ITIN Number and W-8BEN (Applicable to foreign workers living outside of USA)

    Quote Originally Posted by Melonie View Post
    ^^^ that would depend on the location of the bank which is actually disbursing SM's payment funds to you. If that bank is in the US, then you'll need to complete a W8-BEN form to avoid 30% US estimated tax withholding. But if that bank is based in Cyprus or any other EU country, then SM's funds would never need to enter or exit the USA thus no chance of 30% US estimated tax withholding and no need for the W8-BEN form.

    The US W8-BEN form is basically A. a declaration that you are not a US citizen, B. that you are engaged in an 'active' business ( as opposed to 'passive' investment / royalty income ), and C. enough personal information being provided to allow the US IRS to ( potentially ) report your US based earnings to your home country's tax agency.
    I get paid through Payoneer, they then transfer the money to my UK based bank account?

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    Default Re: ITIN Number and W-8BEN (Applicable to foreign workers living outside of USA)

    ^^^ If I remember correctly, Payoneer routes their payments through a bank based in Belize ... thus, provided you aren't working through a US based webcam host, no US connection is involved in your payments and no need for a W8-BEN.

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    Default Re: ITIN Number and W-8BEN (Applicable to foreign workers living outside of USA)

    Quote Originally Posted by Melonie View Post
    ^^^ If I remember correctly, Payoneer routes their payments through a bank based in Belize ... thus, provided you aren't working through a US based webcam host, no US connection is involved in your payments and no need for a W8-BEN.
    I work on SM, aren't they US based? Sorry, the tax etc side is not my strongest point!

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