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Question about Steam, USA Tax Laws, Tax Treaties & "Foreign TIN"

cliveclive
in General
Hi all,

So having filled the all the tax information within Steam it got to the end and gave the following:
Withholding Rate 30%
Now, from what I understand that means 30% Tax will be deducted (USA side) on sales, so after further reading I discovered that South Africa does indeed have a Tax Treaty with the USA and it's apparently definitely worth selecting that when (re)entering all tax information ... however: if you do so, you're asked to enter a Foreign TIN (Tax Identification Number) which is the only part I'm actually unsure about. Is this a local (SARS) company tax registration number?

It seems like the "Foreign TIN" (from their perspective) should be that, I would just like confirmation from anyone that knows for sure.

Thanks,
Clive

Comments

  • AngryMooseAngryMoose
    Pretty sure this has been talked about before on the boards. Did the info ever make it to the FAQ or Wiki?

    Basically you needs to register for a TIN or EIN or the like with W8BEN forms and such (on mobile, can't look up exacts) then give that to the people sending the money.

    Dig some more on the forums for existing details or wait for someone else to give you a more specific answer :)
  • cliveclive
    Instead of requesting a U.S. TIN from a foreign payee, you may request a foreign TIN issued by the payee’s country of residence ...
    It's this one I qualify for, in Steam's backend the TIN issued by payee's country of residence.

    The rest of the forms are easy and obvious I'd just like to know what they mean by "foreign TIN issued by the payee’s country of residence".
  • ShadowBladeShadowBlade
    Here is one of the previous threads covering the topic: http://www.makegamessa.com/discussion/comment/28029/

    Basically, know your info (or download and fill out the SS-4 form to make it easy), phone the IRS and they'll give you the EIN or TIN number. You can then use that on the W8 form to exempt you from that 30%.
    Thanked by 1clive
  • dislekciadislekcia
    clive said:
    The rest of the forms are easy and obvious I'd just like to know what they mean by "foreign TIN issued by the payee’s country of residence".
    Valve is the payee. They're in the US. Thus you need a Tax Identification Number (TIN) from the IRS. If you're a company, that's an EIN. If you're an individual, that's an ITIN. Both are obtainable by following the process outlined in the thread @ShadowBlade linked.
    Thanked by 2AngryMoose clive
  • cliveclive
    Thanks guys!

    I did search the forums but I guess the search-fu was not with me.

    That discussion, and this, have answered everything I needed to know. It's for a business account so EIN is what I need, damn that 30% is high ...

    Anyway must get this all done, mentioned my one game was greenlit at the breakfast meet last week since then I've had another game greenlit so I have two games I need to ready for this whole process. So much to be done :/ at least all my problems are good problems to have.
  • cliveclive
    So, in the end I contacted Valve Finance themselves and got the following response:
    Based on our information, a TIN in South Africa looks like: YYMMDDSSSSCAZ This is what the tax interview is looking for in terms of a foreign TIN.
    There's no need to contact the IRS at all, no need for a US TIN, ITIN or EIN they (valve) just need your verification that you're in South Africa and in case you didn't recognize that little stream "YYMMDDSSSSCAZ" that's the format for your ID Number (South African ID) ;)
    ... so, you don't even have to contact SARS either (until it's necessary).

    Basically you're promising to take care of your own tax and valve, on request, has a lookup should SARS ever ask them.

    Clive
  • dislekciadislekcia
    edited
    @clive, um, that's not what anyone else here who does business with Valve used. There might be certain forms that require SA ID information (like to prove to them that you live in SA), but you definitely need to fill out a W8-BEN-style form at some point, otherwise you're going to be eating the withholding tax. That family of forms is the only way they can tell the IRS that the tax withholding is pointless and shouldn't happen.

    What form are you looking at? If you haven't been told to sign a W8, you're going to get one from them in the future. To successfully complete a W8, you need to get an EIN from the IRS. (And I would have thought that the wording around the "foreign TIN" - "the country of the payee" - is explicitly clear that the payee in this case is in the US) I'm not sure why you're avoiding this, it's not hard at all - is it to do with the UK - SA company move?

    P.S. Your ID number doesn't really do anything to identify you from a tax perspective, an SA tax number is a completely different format ;)
  • cliveclive
    edited
    @dislekcia

    Yes, I've completed the W8, yes, I used my ID number. What you're saying is not what Valve told me after speaking with them directly. As a South African I don't need anything at all from the IRS. It's all done and dusted using my South African ID number which is what SARS asks for with regard to their treaty with the US according to Valve and according to the W8.

    So either you guys all did a lot more than was required, or the process has changed.

    image

    EDIT:
    I'm not sure why you're avoiding this
    - It's not avoidance, it's ensuring it's done correctly and with the least admin overhead. Finding out how to set this up correctly is hardly avoidance.
  • dislekciadislekcia
    edited
    That's super weird. What version of the W8 did you get? I had to sign a much more complex W-8BEN-E for Humble last year and that seems to be the new standard (we're an Active NFFE, according to the form) if the process has changed, that's cool. It's just strange that the IRS would be okay with lowering their paperwork burden, that certainly wasn't an option when we signed originally.

    Valve Finance have definitely changed their procedure. The information we were getting last year (and that's working, because we get paid) was that a W8 always required a US TIN, no matter what.
  • ShadowBladeShadowBlade
    edited
    Yeah, this sounds odd. I'd say it's much safer, and will likely avoid very unpleasant headaches in the future, if you just call the IRS and get the EIN/ITIN. You also get the advantage of using that for any other store/bundle/etc. It only takes about 20 minutes as well.

    I've needed the W8 with EIN for all stores based in the US, as well as Bundles. You'll need it for Humble, especially.
  • cliveclive
    edited
    As of August 2014 (link to full document below):

    image

    Full document

    [EDIT] This is for a W8-BEN-E Only, as of August 2014
    Thanked by 2dislekcia ShadowBlade
  • dislekciadislekcia
    Cool :) That makes life a little easier for first-time signups. I like how they made the form more complex (which goddamn entity type are we anyway?) but made the setup requirements less.
  • cliveclive
    Yea, my other company was UK based and everything's been setup for it for ages. This is my "hobby" stuff that I'm trying to get live so I've never had (for a US company) South Africa as the source. Oddly enough I've traded though Europe mostly either directly or via a third party. That said however I'm pretty sure Ubuntu Software Centre is US based and they've never asked for anything like this -- makes me wonder.
  • ShadowBladeShadowBlade
    Hah, that's something. Thanks for the info :)
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