Yesterday, I received a tax return document from an Australian based Internet commpany selling WordPress theme and stuff. I haven’t signed in there for quite a long time, and didn’t even realize I got a little comission in there. I thought only Americans or people earning income in the US need to pay attention to IRS. I remember that I clearly put my Canadian address in my profile, are they assuming that I’m an American living in Canada? Do they assume any members without a US address must be Americans living abroad?
To find out more, I signed in and noticed that there is now something called Royalty Withholding Tax. Generally speaking, transactions in digital creative content gives rise to royalty earnings. So even if you are a non-US user, your earnings (commissions) may still be subject to withholding based on your country’s income tax treaty with the USA. Any tax withheld will be remitted to the IRS on a monthly basis, and not held by the website themselves. This practice has been started since Jan 1 2016. Ok, so I haven’t signed in more than 2 years, LOL. And according to information provided by the website, the Royalty WHT Rate of Canada is 0, that’s good news eh. https://www.irs.gov/pub/irs-utl/Tax_Treaty_Table_1.pdf
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