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Residency Certification for US Vendors to Overseas Biz?

Has anyone here had to file for "Form 6166, a letter of U.S. residency
certification."?

More: "Form 6166 is a computer-generated letter printed on stationary bearing the U.S. Department of Treasury letterhead, and the facsimile signature of the Field Director, Philadelphia Accounts Management Center."

The reason is, the client wants to avoid having to withhold taxes from my payments. It appears that certain countries that are treaty members for tax purposes agree to use this kind of documentation to determine whether they withhold taxes at the source.

This is a PITA for this small volume of business. Anyone had to do this?
Profit and Loss Send private email
Monday, August 26, 2013
 
 
Never heard of it.  But have had to jump through a few hoops to avoid withholding tax for sales to Israel.  No where else though.
Doug Send private email
Monday, August 26, 2013
 
 
6166 doesn't ring a bell but for American clients I often provide a.. hang on, W something... W8-BEN

Similar kind of thing, just a statement that I don't live in America and have no obligation to pay American taxes.

The Land of the Fee, sorry, Free is one of only a handful of places in the world that continues to charge tax on citizens who leave the country. Such forms are partially to ensure that Americans abroad are continuing to pay tribute to their Lords and Betters back home.

Yes, such things are a PITA, at ANY volume. Yes, they're normal for America.


AC
Reluctantlyregistered Send private email
Monday, August 26, 2013
 
 
Here are the instructions for the form: http://www.irs.gov/pub/irs-pdf/i8802.pdf

The customer originally asked me for a "certificate of residence".
Profit and Loss Send private email
Monday, August 26, 2013
 
 
> Yes, such things are a PITA, at ANY volume. Yes, they're normal for America.

I'm in the US. The customer asking for this is in Europe in a tax treaty country. Paperwork isn't exclusive to the US.
Profit and Loss Send private email
Monday, August 26, 2013
 
 
You are outside the US or what?

Let's say your rate is $100/hr. Then you receive, as a independent contractor or perhaps your own business, $100/hr. There's no withholding because YOU ARE NOT AN EMPLOYEE.

If they pay you $60 or $80 or whatever that is LESS than the $100 they agreed to, they are in breech of contract, and you can shut down their site, retain copyright ownership of the product, etc.

If they want to throw tribute to whatever country they are in, that is their business, but the amount they pay you is $100/hr.
Scott Send private email
Tuesday, August 27, 2013
 
 
OK, looked at the form, that's dealing with personal INCOME, not company REVENUE.

It doesn't apply to you because you are not their employee.

However, and this is the important part, so listen carefully: no one on this board knows the answer to this question and you are a moron for not paying a licensed international tax attorney, who costs at least $500/hr, to figure this out for you, because that's the only way you're going to get the correct answer here.
Scott Send private email
Tuesday, August 27, 2013
 
 
@Scott -  to address your points:

First post: yeah, the withholding requirement is entirely their problem. If we agree to $X, then - worst case where they have to withhold - they must pay me $X+taxes. So that when they withhold the taxes, they can remit to me the balance due which is $X.

Second post: "It doesn't apply to you because you are not their employee." I'm not sure they're paying attention to this part, that I work through my own US based business entity also.

"you are a moron for not paying a licensed international tax attorney, who costs at least $500/hr" - the total volume of business is not even at that dollar level.

Basically, I rejected their requirement. It's too much hassle for the value of the business.
Profit and Loss Send private email
Tuesday, August 27, 2013
 
 

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