When you earn money overseas some tax may be withheld at the source territory
You should disclose any withholding tax when you complete your tax return, APRA AMCOS present your withholding tax on your remittance advice
Some aggregation services may require a W8BEN form which informs the US tax authority that you are not a tax resident in the US
Yes, it can be a boring and complex topic, but if you are earning royalties overseas it’s pretty important that you (and your accountant) understand how you are taxed, and keep updated on international processes.
APRA AMCOS Chief Financial Officer, Tim Denny, is here to help with answers to some of the more common tax questions we hear from members.
So what happens with the money I earn overseas?
In some instances the royalties you earn in foreign territories are subject to withholding tax. This tax is withheld at the source (held in the foreign territory) and the rate withheld depends on the tax agreements between Australia or New Zealand and that country.
Does that mean I’m taxed here as well as there?
No it doesn’t. Both APRA and AMCOS detail any withholding tax you have already had deducted from your royalty earnings on your remittance advice. When you, or your tax adviser/accountant, lodge your tax return here in Australia or New Zealand you should disclose that amount on your tax return so that it is treated as ‘tax already paid’ against your taxable income.
Are you able to shed some light on what a W8BEN form is and what it does?
Recently some of the aggregation services operating in the US (Spotify, Tunecore etc) have asked individuals to provide a W8BEN form to them before they will make royalty payments. The W8BEN form is the way an individual advises the US tax authority (the IRS) that they are not a tax resident of the US. That is, to let the IRS know that your earnings in the US are subject to withholding tax (as above) and not income tax. It is a form that you provide to the service, not the IRS directly and generally speaking the form has a life of around three years. So, if you are in the US but you’re a tax resident in another country, you may need to provide a form every three years or so. It is in your best interests to provide the form and make a note of when you should provide a new form.
What else can APRA AMCOS help me with when it comes to tax?
We can’t provide tax advice to our members because everyone’s situation is different. However, we are happy to provide general guidance. If you have any questions we encourage you to send them through and if we can help we’ll answer them.
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