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Developer
Posts: 579
Registered: ‎04-01-2009
My Device: Z10, PlayBook
My Carrier: NA

Tax Forms

I recently received an email from App World on the subject of setting up tax forms. They provide a PDF with some information on the reasons for submitting the W-8 tax form for the United States, which is that otherwise developers are required to pay the maximum rate of 30% for sales into the US.

So I started investigating, and it is a bit of a rabbit hole.

The W-8 form asks for you to enter a tax identification number. But I don't have one, so another form needs to be filled out and mailed to the IRS. But that form requires you to know information about tax treaties between the US and Canada, so you are directed to a giant document detailing various tax treaties between the US and other countries, which I don't understand.

And on top of all that, one of the forms requires that you get a photocopy of your passport notarized by a notary public.

What a mess. Knowing how many Canadian devs there are, I'm not sure why RIM doesn't provide some more explicit guidance on whether or not it is worth going through all of this trouble. Why not tell devs directly the scenarios in which it makes sense to go through all of this trouble? It seems very inefficient for each developer to have to do all of this investigation -- it's duplicated effort.

Developer
Posts: 466
Registered: ‎04-11-2012
My Device: Bold 9900
My Carrier: Rogers

Re: Tax Forms

i hear you daniel, i think its silly that Canadians have to pay US tax for app revenue. I see it more like internet sales where you should only have to pay tax on revenue (income) in the location where you are incorporated/from and sales tax only if the sales is conducted in the same province/state. I think this is very silly. I dont get enough sales in US to justify me doing the whole notarize process. Hopefully RIM can explain this US tax non sense.


Developer for easyDial for BlackBerry Bold & inLink for BlackBerry PlayBook
Find me online via twitter, or on the techfruits.com webpage. Please hit the like button below if what I said helped!
BlackBerry Development Advisor
Posts: 310
Registered: ‎03-13-2009
My Device: BlackBerry Z30
My Carrier: RIM

Re: Tax Forms

HI dbigham,

 

Can you send this question to customersupport@blackberrycommerce.rim.com?  The BlackBerry Commerce team will be able to clear up and questions regarding the Tax Documentation.

Developer
Posts: 579
Registered: ‎04-01-2009
My Device: Z10, PlayBook
My Carrier: NA

Re: Tax Forms

On July 10th I emailed customersupport@blackberrycommerce.rim.com and on July 20th I got a very helpful answer.

 

As a Canadian selling into the US, it only potentially makes sense getting a US tax identification number if your apps involve subscription fees to your customers. If your apps are a one-time cost to your customer, then "the vendor would not be subject to withholding". My interpretation of this is that the US withholding tax referred to by RIM only applies to subscription revenue, so for the vast majority of devs, there is no US tax subtracted from sales, and there is no need to send forms to the IRS to get a US tax identification number. (and thus, no need to get anything notarized)

This simplies the process to simply filling out the W-8BEN form, scanning it, and uploading it to RIM via the Vendor Portal.

Also to note is that the "foreign tax identification number" (field 7) on the form refers to the SIN (social insurance number) for Canadians.

Hope that helps. I've recommended to RIM that they should clarify their requirements to devs with information such as the above so that it's not a big mystery for everyone.

 

http://playbookdev.net/document.pl?mode=Display&DocumentID=946

Developer
Posts: 1,452
Registered: ‎11-06-2009
My Device: Torch 9810
My Carrier: WiFi

Re: Tax Forms

I got a similar answer:

http://supportforums.blackberry.com/t5/BlackBerry-App-World-Development/W8-BEN-registration-for-Euro...

 

2) Do I need to apply for EIN number to IRS (International Revenue
Service) in order to fill the W8/W8-BEN form?

        No, you do not need to apply for an EIN number to fill out the W8 form.


"When you become a level 3 developer, you learn to communicate over the ether. I'm told that level 5 developers are ascend into a higher level of existence beyond the physical realm." gord888 @ crackberry
Developer
Posts: 6,473
Registered: ‎12-08-2010
My Device: PlayBook, Z10
My Carrier: none

Re: Tax Forms

I just filed my W-8BEN. I also read the instructions, which make it clear you don't need to apply for a TIN from the IRS if you don't want to, though that means the form expires 3-4 years after the date on which you signed it. If you do apply for a TIN the form stays valid as long as nothing on it changes.

(I know nobody above mentioned TIN, but it's the same field as the EIN and it appears individuals would be getting a TIN and not an EIN anyway. Whatever.)

Also to dbigham, as you're Canadian you shouldn't have had to file anything except the W8 form. The others are for non-residents of Canada, as far as I can tell.

Peter Hansen -- (BB10 and dev-related blog posts at http://peterhansen.ca.)
Author of White Noise and Battery Guru for BB10 and for PlayBook | Get more from your battery!
Developer
Posts: 178
Registered: ‎03-10-2011
My Device: Not Specified

Re: Tax Forms

Good to know ITIN is not reqiured for W-8 form. It is such a painful to apply US ITIN in some countries like Singapore. IRS requires supplied documents (eg, photocopy of Singapore passport) to be certified, but the problem is, only notary publics from countries that are members of the Hague Convention can notarise documents for ITIN application, Singapore is unfortunately not the member of Hague Converntion hence local notary publics won't help.