Hi there, I have a question.
- US withholding tax (for international payees only)
This is for sales only from US, or if I sell in other countries I'm also charged this tax?
Viewing post in 30% instead of 10% itch.io cut?
The way I understand it is that you pay this tax as soon as you transfer profit you made in the US to a country outside the US. All money you made is made in the US as Itch is an American company. So this means as soon as you initiate your payout, and you live outside the US, you pay this tax on all of your profits.
I mean, you have to look at the trade deal your country has with the US. For me, being from Belgium this is in my advantage. If I didn't pay taxes in the US, as a freelancer I'd have to pay 50% of my profit as taxes to Belgium. But thanks to the trade deal that is now 30% to the US and 0% to Belgium. ;) People living in the US don't have to pay this tax, but they probably have to pay sort of an income tax at some point, which is unrelated to Itch, hence not mentioned.
I got this from Steam panel:
"Payments made to you may be subject to US tax withholdings per US tax reporting regulations. Developers may be eligible for a reduced or exempt rate of US tax withholding on units sold to US customers if your country of permanent residence has an income tax treaty with the US. At the end of the interview, you will be notified of the US withholding tax rate, if any, that may apply to you."
So, this withholding tax should apply only for sales for U.S.A. customers, right?
I don' t know about Steam, maybe they have a branch in Europe(/brazil?, I doubt it ;) ). If they do have a branch in your country, you won't have to pay the tax cut I guess.
But with Itch (and I assume steam as well honestly) any payment (either by US, European or Brazilian citizen) is made to an American Company (Itch, Steam, ...). So the money you make, is made in the US. This means you pay this tax on all money you made.