07-10-2012 11:41 AM
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.
07-26-2012 11:41 PM
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.
07-27-2012 07:33 AM
Can you send this question to email@example.com? The BlackBerry Commerce team will be able to clear up and questions regarding the Tax Documentation.
07-27-2012 10:24 AM
On July 10th I emailed firstname.lastname@example.org 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.
07-27-2012 10:40 AM
I got a similar answer:
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.
01-05-2013 09:32 AM
03-14-2013 06:08 AM
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.