Non-US tax from Appstore earnings?

Question

Does Apple "withhold a part of the earnings for tax purposes" even for non-US developers? I've seen this related question but it's not clear what happens to non-US developers. There's a reference to a form "W-8BEN" but I don't understand it -- is this what I have to fill out when I'm non-US and I want to avoid Apple to withhold the tax?

I know for instance earnings from Dreamhost referral reward programs are only taxed for US citizens -- it is explicitly stated that for non-US people the full reward is paid out and they must handle the tax issue themselves. It's this kind of explicit statement that I'm looking for regarding earnings from the app store.

Answer 1

Passing on an answer from a friend (hi Glen) - this is the Australian perspective.

You should read the W-8BEN Tip Sheet downloadable from the Manage Your Tax Information screen in iTunesConnect. In particular, you don't need an ITIN as a Australian company/sole trader. Apply for the EIN instead using the provided SS-4 and fax it to the number given. You should get back the EIN details from the IRS in a couple of days. I received the number in 4 days from the fax and I think they also mailed me a letter in confirmation. You can then use the EIN to fill in Apple's documentation.

The other thing you should note is the Japanese tax form. If you expect decent Japanese sales e.g. if you've localized the content for Japan, then not filling in this form will lose you 20% of sales to withholding tax. Moreover because of the exchange rate etc. fixed at the time of the App Store opening, you actually get more per seat in Japanese sales than anywhere else. It takes 90 days for them to process this so the sooner you send it out, the better. I waited too long because I found some sections confusing but after checking with the iTunesConnect people it was actually quite straightforward.

Answer 2

You should probably be in contact with Apple, instead of Stack Overflow.

edit: I assume that someone thinks that asking Apple directly is something you shouldn't do, since I got a downvote ;)

Answer 3

A W8BEN form allows a non-US company to declare that the US should not withhold taxes. A valid reason must be supplied. In ours we simple state the section of the NAFTA treaty that applies to cross border trade (part II, #10: "Article VII", "0%", for type of income "software license", reason "Corporation is a resident of Canada.")

Never had a problem getting full payment once the form has been filed with the customer.

Frankly it's a bit annoying but we've gotten used to it (and the form doesn't need to be customized, just recently dated).

Basically all Apple is looking for is the paper work so they can check the "0% withholding tax" checkbox in their accounts payable system.