W-8BEN tax Documentation? help please! >.<

[Darkraven Danick]

hi all.

 

I am a non-U.S. residents and I sell items on marcketplace for money. Lately, when I try to proceed credits, LL sent me a link for sign on that "W8BEN: Certificate of Foreign Status". 

 

I try to search the issue on KB, but I only find this:  http://community.secondlife.com/t5/Commerce/Required-Tax-Documentation/ba-p/2336109

 

And on the document, they say there's a 30% tax rate on my incomes.

 

What I want to know is:

. what is the threshold value of the tax paying on non-U.S. residents?

. does it charge on every transaction after I reach the threshold, or only on the amonuts that exceed the threshold?

 

Say, if the treshold is 5000 USD per year, and if I earned 6000 this year:

are they going to apply 30% on the 6000 I earned (6000*30% = 1800), 

or are they apply that 30% only on the amount that exceed 5000? (6000-5000)*30 = 300 ?

 

if they apply that 30% tax on every transaction, it'll be impossible to run a bussiness here.

LL already charged 5% on MP and another 5% on when selling LS, a 40% loss of incomes can be critical.  >.<

 

 

 

[Alwin Alcott]

selling thing on MP is creating income .... income means taxes

when it 's about the amounts you mention aalmost ll governments will get interested in what you earn, LL wants to avoid they will be responsible for the fact you withdraw money from SL.

[Tari Landar]

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Alwin Alcott wrote:

selling thing on MP is creating income .... income means taxes

when it 's about the amounts you mention aalmost ll governments will get interested in what you earn,

LL wants to avoid they will be responsible for the fact you withdraw money from SL.

---

That has nothing at all to do with it. Taxes are your responsibility to pay, if you live somewhere they must be paid and you don't work for someone who takes them out for you. In fact in some places, in some types of jobs, etc.. an employer doesn't even have to take them out for you. LL isn't an employer for merchants in the first place, so that bit is irrelevant, really. It is an individual's responsibility, period, to make certain any taxes they are intended to pay, get paid. You can't toss that onto LL as if it's their fault. They have enough faults as it is. This one isn't one of them. If you don't want to pay taxes, don't make earnings that would require you to do so, problem solved. Although I'm fairly certain most wouldn't survive, well, on that sort of ideal, lol.

As for the OP, I think you might need to consult someone who actually knows more about your taxes in whatever country you may live in. I can't help with non-us taxes, as I'm a us citizen and those are the taxes I know. Hopefully someone will come along who may be able to better answer that. I would still, however, make certain you're aware and up to speed on whatever local taxes(your country, etc..) you are required to file, when, why, etc.. It never hurts to be informed.

[Lucillle Hotshot]

Hi all,

 

I am in the very same situation. I am a non-US citizen and after the last time I tried cashing lindens out I got this email asking me to provide W8BEN form to start paying 30% for taxes and now my money is on hold. I am terribly annoyed and concerned I was not not notified BEFORE I cashed the lindens out the last time. I would have happily spent them in-world instead of paying for something I already declare on my local annual declaration of income in my country.

 

I've read that W8BEN is only applied to those who make 20 K dollars a year (definitely NOT my case, I am WAY FAR from that amount) or those who had more than 200 transactions. That is just RIDICULOUS. Most of my transactions are for just a couple of dollars. So if I have 200 transactions of 1 dollar each I am in a worse situation than a person who earned 19.999 USD in a few transactions?

 

I feel I was scammed by LL.  I think I should have been notified BEFORE my money was held that I was going to be required to pay taxes (and such a great rate!!!!). i am creating tickets with no response so far and I've realized they removed the online chat for users with Payment Information on file. Not even a phone number. It is a VERY POOR customer support.

 

I don`t own a big business. I struggle to make some money there spending a lot of hours a day working hard. I already pay a lot of commissions (LindeX, Paypal, the bank, etc). If I have to pay an additional 30% I will simply take my business elsewhere, I just can`t afford it.

 

I understand LL reduced staff must be hectic these days, but I would certainly appreciate some sort of response from their side, even if it was just to make sure they acknolwedged my case and are working on it.

 

Does anybody know for sure which is the amount over which they start asking to pay taxes and if the rate applies to future payments or if they will claim to pay over all what's been transferred?

 

Thank you all for your help.

 

 

[Darkraven Danick]

thanks for the response.... but your answer is not helping... X.X

 

is there a Linden around to answer my question please?  I can't find anything in the knowledge base......:matte-motes-mad:

[Darkraven Danick]

I made less than 10K last year, in fact. they still want me to fill that stupid W-8BEN form, or they won't let my money go.

 

Wondering what's wrong with LL and / or Uncle Sam. This is crazy     :matte-motes-sick:

[MIstahMoose]

10k is quite a bit. Its definitely taxable, any income is in america really. Though I think 30% tax is a bit easy going since all you sell is copyrighted items. Is that why you're so worried about the tax maybe?

[Reeva Hax]

Here there is a post linked to some FAQ about this. If you look to past threads you will find other 3 or 4 about this issue.

Non US residents have to pay taxes where they live (based on that country system taxation), IF their country has a tax treaty with US. There is no automatic withdraw from LL in that case. For country without tax treaty, I don't know.

The W8-Ben form and the ID proof request is sent also to people with a lot less than 200 transactions/20k $ (that is however a threshold valid for US residents), and a lot of people received the request after starting a credit process. 

Once filled up the form and sent the ID proof (uploading it to the opened ticket) the case is closed and the money flow restored (but start to count again the 5 business day from there...)

And there is no turn around. LL states that if you don't comply within 30 days, the entire SL account will be put on administrative hold (so is not only about the blocked credit process).

[Amethyst Jetaime]

What if any tax you'll pay to the US will depend on if your country has a tax treaty with the US and what the treaty says about it. Tax treaties exist, for countries to agree on who taxes what so that someone like you ends up not having to pay taxes on the same money twice. Most likely if you don't pay to the US you will have to pay taxes on it in your country.as the US may be required under the treaty to report the income to your country. You should contact your countries tax authority to find out what tax treaty exists with the US and how it applies to you, as ultimately it is your responsibility to pay whatever taxes you owe to the right place.

If your country has no tax treaty then you may have to pay income tax to the US on that money since it was earned here. The servers are all in the US and you agreed to be under US jurisdiction when you agreed to the TOS.  The withholding rate of 30% is just what LL is required to withhold by law IF you don't claim an exemption on the form required or request zero withholding if you are liable for taxes.  That is not necessarily the actual tax rate you will pay though, if you are required to pay US taxes.  You will need to file a tax return and the actual rate you pay will be determined by your total US income and deductions.  Any money withheld in excess of your actual tax bill will be refunded to you.

[Perrie Juran]

United States Income Tax Treaties - A to Z

"The United States has tax treaties with a number of foreign countries. Under these treaties, residents (not necessarily citizens) of foreign countries are taxed at a reduced rate, or are exempt from U.S. taxes on certain items of income they receive from sources within the United States. These reduced rates and exemptions vary among countries and specific items of income. Under these same treaties, residents or citizens of the United States are taxed at a reduced rate, or are exempt from foreign taxes, on certain items of income they receive from sources within foreign countries. Most income tax treaties contain what is known as a "saving clause" which prevents a citizen or resident of the United States from using the provisions of a tax treaty in order to avoid taxation of U.S. source income.

If the treaty does not cover a particular kind of income, or if there is no treaty between your country and the United States, you must pay tax on the income in the same way and at the same rates shown in the instructions for the applicable U.S. tax return.....

This page provides links to tax treaties between the United States and particular countries......"

[Lucillle Hotshot]

After a day I have finally heard back from LL (online chat is no longer available, they do not even have a hotline, so you depend on these time consuming tickets).

 

I pay my taxes in my country. I shouldn't be paying them twice. I have been saving my money for a lot months. I just want to CANCEL the operation and to receive the lindens back in world to finally start enjoying my second life and spend them in mesh clothes and maybe rent land for a couple of months. But guess what? LL will NOT give me MY OWN money back unless I feel this form.

 

I have NOT been warned before I started processing the credit about this BEFOREHAND. How hard is to add a popup? All I know is that I am being forced to fill a form to CANCEL the operation and receive MY OWN MONEY BACK. I am clearly being harrassed and forced to do something I was not told in advance. I think they are killing what little business SL had left. 

I have adopted every single measure over the last years (age verified, forced me to add payment information to use LindeX when they banned 3rd party services, etc). But this is too much, to have to complete a form to have MY OWN LINDENS BACK? I don`t want to cash them out of the game, I want to use and enjoy them IN WORLD?

 

Is that crazy to want to use my own money, the same one I worked hard to get?!

 

Are you people suffering from the same disrespect and lack of manners?

[Perrie Juran]

---

Lucillle Hotshot wrote:

After a day I have finally heard back from LL (online chat is no longer available, they do not even have a hotline, so you depend on these time consuming tickets).

 

I pay my taxes in my country. I shouldn't be paying them twice. I have been saving my money for a lot months. I just want to CANCEL the operation and to receive the lindens back in world to finally start enjoying my second life and spend them in mesh clothes and maybe rent land for a couple of months. But guess what? LL will NOT give me MY OWN money back unless I feel this form.

 

I have NOT been warned before I started processing the credit about this BEFOREHAND. How hard is to add a popup? All I know is that I am being forced to fill a form to CANCEL the operation and receive MY OWN MONEY BACK. I am clearly being harrassed and forced to do something I was not told in advance. I think they are killing what little business SL had left. 

I have adopted every single measure over the last years (age verified, forced me to add payment information to use LindeX when they banned 3rd party services, etc). But this is too much, to have to complete a form to have MY OWN LINDENS BACK? I don`t want to cash them out of the game, I want to use and enjoy them IN WORLD?

 

Is that crazy to want to use my own money, the same one I worked hard to get?!

 

Are you people suffering from the same disrespect and lack of manners?

---

Where do you get that you will be paying taxes twice?

Perhaps LL should and could rewrite the web site to reinforce the fact they (try to) follow all tax laws.

But this has still been well publicised now.

[Magnet Homewood]

Seriously, wake up, people!

This is a Real Life tax situation, and you come to a forum full of annonymous avatars - you don't know about us and we don't know about you. You would really trust any info provided here?

A Linden won't come in here and help, it isn't their responsibility to help in your real life problems. They give as much information as they are obliged to do, and that is all you can expect.

Contact a person qualified to advise you on your tax situation in the area where you live, as well as the situation for taxes in the US.

That is all the advice you can actually trust from this forum.

[Lucillle Hotshot]

I declare the income in my country annual income declaration. If I pay now in the US too I'd be paying both in the US and locally.

[Perrie Juran]

---

Lucillle Hotshot wrote:

I declare the income in my country annual income declaration. If I pay now in the US too I'd be paying both in the US and locally.

---

If you file the form then you wont pay if your country has a tax treaty.

That's the point.

It's called with holding....they hold the money until they know it's ok to send it to you.

They don't know if it is ok until you file the form.

[Steph Catseye]

I have no idea why there must be such a messy discussion, It cleary states if you don't provide your information to the IRS Linden Labs is obliged to hold back 30% because Linden Labs has no way to proof who you are and could be held responsible for money laundering and is therefore virtually paying taxes for the generated money by witholding it.
Once you have filed the form Linden Labs will pay you what they owe and the tax laws in the country of your residence will kick in.

 

[Darkraven Danick]

it's still confusing, and I still don't know what the threshold value is...   it is 20K?  :matte-motes-confused:

and does that means they'll still sent the (untaxed) money to my paypal unless I exceed that threshold?

 

I already declare the income in my country, I really don't want to pay BOTH my country and US in the same time. With so many vampires around it'll be impossible to make any bussiness here...    :matte-motes-confused:

[Darkraven Danick]

if you divide it by 12, it isn't that much....

and nope , it is not 10K, it is LESS than 10K.  so you know how little money I made here... >.>

[Lucillle Hotshot]

Thank you all for your replies. LL has not been able to tell me exactly which the threshold amount is. I read somewhere it is either 20 K USD during the previous year (which of course I do NOT earn) or 200 transactions. I think this is most absurd, as a person with 200 transactions of 1 dollar each would in a worse situation than a person making 19.999 USD in a lesser amount of transactions.

 

Everything has been rushed and with little to none communication. I'm afraid I will have to leave SL as after all the comissions and the already depressed economy it will be just not worth spending a lot of hours to earn little money.

 

I would appreciate if ANYONE could answer the following questions. The replies I get via ticket are vague and look like copypasted from a template sheet of FAQs. I don't blame them, they must be getting thousands of tickets so they sort of reply default preset answers with generic explanations.

 

My doubts are:

 

1) Which is the threshold in USD? Does it apply to year 2013?

2) Is it true you are liable to pay taxes after you reach 200 transactions regardless the amount of each (very unfair, but read about that somewhere).

 

3) Which is the tax rate for non-US residents? Will it be aplied hereafter or during the total amount earned during the previous year?

 

4) If I already declare in my local country and pay taxes here, would I still need to pay (even if partially) taxes?

 

5) If I do not provide the ID w/picture and W8BEN form, my account will be cancelled. i have both dollars that are pending for approval  and lindens in-world. Will they be cashed and sent to my Paypal account in a one final payment? Do I need to sell the in-world lindens as well or will they do it automaticall? At which rate?

 

I do appreciate all your help. I do understand LL is obligued by the IRS to comply with this, but I consider they could have communicated this in a better way  specially for those who have been working in SL for years (and therefore paying LL $$ in commisions). The replies via ticket are delayed , provide little information and over the phone they cannot answer any payment related issues.

 

Thank you all for your assistance!!

 

[Perrie Juran]

---

Lucillle Hotshot wrote:

Thank you all for your replies. LL has not been able to tell me exactly which the threshold amount is. I read somewhere it is either 20 K USD during the previous year (which of course I do NOT earn) or 200 transactions. I think this is most absurd, as a person with 200 transactions of 1 dollar each would in a worse situation than a person making 19.999 USD in a lesser amount of transactions.

 

Everything has been rushed and with little to none communication. I'm afraid I will have to leave SL as after all the comissions and the already depressed economy it will be just not worth spending a lot of hours to earn little money.

 

I would appreciate if ANYONE could answer the following questions. The replies I get via ticket are vague and look like copypasted from a template sheet of FAQs. I don't blame them, they must be getting thousands of tickets so they sort of reply default preset answers with generic explanations.

 

My doubts are:

 

1) Which is the threshold in USD? Does it apply to year 2013?

2) Is it true you are liable to pay taxes after you reach 200 transactions regardless the amount of each (very unfair, but read about that somewhere).

 

3) Which is the tax rate for non-US residents? Will it be aplied hereafter or during the total amount earned during the previous year?

 

4) If I already declare in my local country and pay taxes here, would I still need to pay (even if partially) taxes?

 

5) If I do not provide the ID w/picture and W8BEN form, my account will be cancelled. i have both dollars that are pending for approval  and lindens in-world. Will they be cashed and sent to my Paypal account in a one final payment? Do I need to sell the in-world lindens as well or will they do it automaticall? At which rate?

 

I do appreciate all your help. I do understand LL is obligued by the IRS to comply with this, but I consider they could have communicated this in a better way  specially for those who have been working in SL for years (and therefore paying LL $$ in commisions). The replies via ticket are delayed , provide little information and over the phone they cannot answer any payment related issues.

 

Thank you all for your assistance!!

 

---

First off Linden Lab can not give you tax advice. 

Second, read again my post, Message #10.  Most of your questions are answered there as well as it including the LINK to where you can look up if your country has a tax treaty with the U.S.

IF your Country has a Tax Treaty the odds are you will NOT need to pay any U.S. taxes.  Then the only thing you need to worry about is taxes in your own country.

If you are still having trouble understanding this then what you need to do is talk to a Tax proffesional in your own country or at least find a friend who understands Taxes to explain this all to you.

Bottom line, you seem to be making this way more complicated than it is.

 

[Lucillle Hotshot]

Hi Pierre,

 

Thank you for your answer and please apologize my ignorance when it comes to foreign taxes related questions. I do appreciate your help and the link but still I do think LL or someone willing to help like you do might want to answer the other 3 questions as it looks like most of my questions remain unanswered still. Please read again my post, Message  # 19.

I invite you or whoever that might be able to enlight me and make this a little less complicated than it is

 

Thank you all!

[Lucillle Hotshot]

Hi all,

Tired of getting the same "automatic" response on my tickets (I seriously believed I was talking with some sort of robot) I finally got the following response from LL:

 

Linden Lab is requesting the information on the advice of our Legal and Finance teams, and must communicate certain information to meet legal requirements. However, we do not disclose all of our internal processes, and therefore the blog posts and wiki pages contain the information that has been publicly disclosed. You're asking questions that go beyond that scope, and at this time we are not permitted to say more on the topic.

They confirmed me that I am not being asked to do this because I cashed over 20 K USD last year (which I wish I did but i am FAR from that number) nor because I did more than 200 transactions. One quick remark on that one, when they say 200 transactions they mean 200 times you sell lindens in LindeX (I think I did 10 in total).

 

When I asked why, if I don`t meet any of the two criteria t I am asked to provide all this infromation and forms, they answered me that they were not allowed to tell me why and they can`t disclose their internal processes  (???). Okay, I am requested to disclose pretty much everything about myself, but they can`t disclose a simple internal procedure?

 

I want to highlight the good will of the people from the Support center. I do understand they do their best and must be probably answerting loads of tickets these days. However, I don`t think it is a decent way to treat someone who has been customer of SL for many years. I hoped to hear some some clear, transparent rules for everybody but unfortunately my questions were never satisfactorily answered.

 

I am walking out of SL with a bittersweet feeling. Glad for the many years and great people I met there but at the same time sad and a bit annoyed about how LL handled this new policy, rushed and pushy and not providing enough information (or at least clear enough).

 

Thank you all once more for your help!

 

Have a great second and real life!

 

 

[Darkraven Danick]

Actually, that means "They don't know it either".

 

My suggestion is, fill in that W-8BEN agreement, and let your goverment / LL worry about the tax issue. they shouldn't charge you the money in that Process Credit step, that's your goverment's (or US gov's) job. 

[Perrie Juran]

---

Lucillle Hotshot wrote:

Hi all,

Tired of getting the same "automatic" response on my tickets (I seriously believed I was talking with some sort of robot) I finally got the following response from LL:

 

Linden Lab is requesting the information on the advice of our Legal and Finance teams, and must communicate certain information to meet legal requirements. However, we do not disclose all of our internal processes, and therefore the blog posts and wiki pages contain the information that has been publicly disclosed. You're asking questions that go beyond that scope, and at this time we are not permitted to say more on the topic.

They confirmed me that I am not being asked to do this because I cashed over 20 K USD last year (which I wish I did but i am FAR from that number) nor because I did more than 200 transactions. One quick remark on that one, when they say 200 transactions they mean 200 times you sell lindens in LindeX (I think I did 10 in total).

 

When I asked why, if I don`t meet any of the two criteria t I am asked to provide all this infromation and forms, they answered me that they were not allowed to tell me why and they can`t disclose their internal processes  (???). Okay, I am requested to disclose pretty much everything about myself, but they can`t disclose a simple internal procedure?

 

I want to highlight the good will of the people from the Support center. I do understand they do their best and must be probably answerting loads of tickets these days. However, I don`t think it is a decent way to treat someone who has been customer of SL for many years. I hoped to hear some some clear, transparent rules for everybody but unfortunately my questions were never satisfactorily answered.

 

I am walking out of SL with a bittersweet feeling. Glad for the many years and great people I met there but at the same time sad and a bit annoyed about how LL handled this new policy, rushed and pushy and not providing enough information (or at least clear enough).

 

Thank you all once more for your help!

 

Have a great second and real life!

 

 

---

You know, I don't understand why you just don't file the form.

At the very worst you will find out you need to pay some taxes on your Income here.

At the best you will find out that because your Country has a tax treaty with the U.S. that you don't.

(You never did say if your Country had a Tax Treaty as listed in the we site I linked).

 

[Pamela Galli]

I suspect some people have not been paying taxes to any country, maybe for quite some time, and hope that they can continue if they don't give that info to LL. Or at least avoid paying back taxes, which they might have a chance of doing if their accounts are anonymous.