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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.
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What is the Apple Tax? “Apple Tax” is a slang term for the commission fee Apple charges for the use of its App Store and in-app payment system. Many purchases made through iOS apps — including in-app purchases like gaming microtransactions and monthly subscription payments — are subject to a 30% surcharge.
To place an order on behalf of a tax-exempt organization or individual, please call an Apple Store Specialist at 1‑800‑MY‑APPLE. You will need to provide proof of state tax-exempt status for the state where the product is being shipped.
The App Store makes it easy for you to manage transactions in 175 territories, and Apple administers tax on behalf of developers in 64 of those territories. Now App Store Connect provides the ability to assign tax categories to your apps and in-app purchases.
Chapter 3 withholding under sections 1441-1443 generally applies a 30% statutory rate of withholding to payments of FDAP income or gains from U.S. sources but only if they are not effectively connected with a U.S. trade or business made to a payee that is a foreign person.
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.
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