PDA

View Full Version : Detected 30% tax and ITIN number


nkuhan
Aug 6, 2012, 02:21 AM
I am sri lanken citizen. Live in Sri Lanka and not a Tax payee in Sri Lanka (i.e not sufficient income to pay tax)
I want to get a prize/services money from USA .
Do I need to get ITIN number form USA IRS?
Do my money will get detected 30% tax from USA?

AtlantaTaxExpert
Aug 6, 2012, 05:46 AM
The 30% withholding would be the amount of the tax you would pay. If the company that issues the prize withholds that amount and does not require you get an ITIN, then you need do nothing, as the tax is already paid and nothing is gained by filing a tax return.

nkuhan
Aug 6, 2012, 06:52 AM
I am not living in USA and not a USA citizen.

(I am)The beneficial owner is a resident of Sri Lanka within the meaning of the income tax treaty between the United States and that country.

So what is the percentage of tax I have to pay?

Do I have Special rates and conditions ? If so
How can I Explain the reasons the beneficial owner meets the terms of the treaty article:

AtlantaTaxExpert
Aug 6, 2012, 09:09 AM
Not sure.

HOW MUCH is the prize in U.S. dollars?

nkuhan
Aug 6, 2012, 09:35 AM
Us$ 200

AtlantaTaxExpert
Aug 6, 2012, 11:36 AM
Under Article 12 (Royalties), the withholding rate is 10%.

Under Article 10 (Dividends), the withholding rate is 15%.

Bother are LESS than the default 30% withholding rate. Submit W-8BEN and cite Article 12 to get the withholding rate reduced to 10%.

nkuhan
Aug 6, 2012, 08:49 PM
This is for, I got price money $200 from a online software competition, will it come under Article 12?

What can I explain for , Explain the reasons the beneficial owner meets the terms of the treaty article in the W-8BEN form:?

AtlantaTaxExpert
Aug 7, 2012, 06:14 AM
Article 12 is the closest I can determine the prize money falls under.

Claim the 10% withholding under Article 12. No other explanation is needed.