Author Topic: Tax withholding for Switzerland - footage 30% ??? For real? (Read 3958 times)

click_click · « **on:** September 21, 2016, 01:40 »

I recently moved from Germany to Switzerland and now it appears that I will lose 30% of my footage sales due to the paragraph 12(1) (W-BEN) regarding Motion Pictures.

Needless to say that this is a real bummer as footage is my bread and butter and I was wondering if it's true.

I found online a PDF from Corbis to help photographers fill out their W-BEN forms with a list of countries and their respective tax withholding rates. Switzerland is listed with both 0% for images and motion picture. What gives?

How is that possible? I got hit with this 30% deduction at SS, VB, 123RF so far.

Does anyone here know a photographer/videographer in Switzerland that I may be able to get in touch with? It appears that photographers in Switzerland do not sell stock photos or footage - at least I couldn't find any.

Oh and does anyone have a link to the IRS website that lists all the countries with their respective rates of tax withholding? I just seem to be unable to find it.

alno · « **Reply #1 on:** September 21, 2016, 02:49 »

Quote from: click_click on September 21, 2016, 01:40

I recently moved from Germany to Switzerland and now it appears that I will lose 30% of my footage sales due to the paragraph 12(1) (W-BEN) regarding Motion Pictures.

Needless to say that this is a real bummer as footage is my bread and butter and I was wondering if it's true.

I found online a PDF from Corbis to help photographers fill out their W-BEN forms with a list of countries and their respective tax withholding rates. Switzerland is listed with both 0% for images and motion picture. What gives?

How is that possible? I got hit with this 30% deduction at SS, VB, 123RF so far.

Does anyone here know a photographer/videographer in Switzerland that I may be able to get in touch with? It appears that photographers in Switzerland do not sell stock photos or footage - at least I couldn't find any.

Oh and does anyone have a link to the IRS website that lists all the countries with their respective rates of tax withholding? I just seem to be unable to find it.

Why are you disclosing your current location to stock sites then? Check this rating sorted by country, maybe it will help you to find some local artists: http://www.microstock.top/index.phtml?p=all&sort=country

click_click · « **Reply #2 on:** September 21, 2016, 03:12 »

Quote from: Irina Anosova on September 21, 2016, 02:49

Why are you disclosing your current location to stock sites then? Check this rating sorted by country, maybe it will help you to find some local artists: http://www.microstock.top/index.phtml?p=all&sort=country

Thanks Irina, but as a law abiding citizen who gets threatened with jail in case of tax evasion I prefer to pay 30% instead of taking that risk. As a contributor we also signed the terms of use that we need to provide current and valid contact information.

Once we move we need to tell the agencies about that. Furthermore, SS and the likes require us to fill out tax forms in order to avoid double taxation on our royalties. I also have to provide documents to the agencies that prove my new residential address such as government IDs, utility bills or bank statements.

I just had no clue that if there is a 0% tax withholding on images that it could be significantly different for motion pictures...

alno · « **Reply #3 on:** September 21, 2016, 03:44 »

Quote from: click_click on September 21, 2016, 03:12

Quote from: Irina Anosova on September 21, 2016, 02:49
Why are you disclosing your current location to stock sites then? Check this rating sorted by country, maybe it will help you to find some local artists: http://www.microstock.top/index.phtml?p=all&sort=country
Thanks Irina, but as a law abiding citizen who gets threatened with jail in case of tax evasion I prefer to pay 30% instead of taking that risk. As a contributor we also signed the terms of use that we need to provide current and valid contact information.

Once we move we need to tell the agencies about that. Furthermore, SS and the likes require us to fill out tax forms in order to avoid double taxation on our royalties. I also have to provide documents to the agencies that prove my new residential address such as government IDs, utility bills or bank statements.

I just had no clue that if there is a 0% tax withholding on images that it could be significantly different for motion pictures...

Isn't that tax rate a matter of a citizenship? Or you've changed yours one and your IDs recently?

increasingdifficulty · « **Reply #4 on:** September 21, 2016, 03:59 »

It's a matter of where you pay taxes, not citizenship.

click_click · « **Reply #5 on:** September 21, 2016, 04:03 »

Quote from: Irina Anosova on September 21, 2016, 03:44

Isn't that tax rate a matter of a citizenship? Or you've changed yours one and your IDs recently?

I have to pay taxes where I live not where I was born.

There are countries where you have to pay taxes to the government where you were born, regardless where you live but only under certain circumstances.

Tror · « **Reply #6 on:** September 21, 2016, 05:00 »

Quote from: click_click on September 21, 2016, 01:40

I will lose 30% of my footage sales due to the paragraph 12(1) (W-BEN) regarding Motion Pictures.

May I ask which paragraph you are exactly talking about? I was having a quick look into it but could not find a corresponding text. Paragraph 12 of the double tax treaty between US and switzerland?

In....

https://www.irs.gov/pub/irs-trty/swiss.pdf

I only find this text here:
"Under Article 12, royalties
derived and beneficially owned by a resident of a Contracting State are generally taxable only in
that State." which is actually in your favor!

Honestly: Online based businesses have to stop to incorporate in the USA. Only disadvantages there apart maybe form nicer invoices for US customers. Beyond that: higher taxes, toooooons of paperwork, pissing off suppliers and contributors.

EDIT:
I found a Table on VB stating it is 30% withholding for Motion Pictures for Residents of Switzerland. I could not find any supporting text in the Paragraph 12(1) of the double tax treaty though. Have you asked a tax accountant? Are you a full timer?

SpaceStockFootage · « **Reply #7 on:** September 21, 2016, 06:24 »

In most places, you can get away with paying tax in your original country, until you've been in the new country for six months. That's why you don't need to pay tax to a dozen different countries if you do a round the world trip for a couple of months. Perfectly legal.

SpaceStockFootage · « **Reply #8 on:** September 21, 2016, 06:26 »

And just on the percentage thing... I don't have the page to hand, so you're probably looking at the right thing, but just in case... make sure it's the 'royalties' section.

SpaceStockFootage · « **Reply #9 on:** September 21, 2016, 06:29 »

And last but not least... double check which category the site in question is going by. I mean sure, it should be motion pictures for video, but what about sites that sell images, vectors, audio etc? Do they use one rate to rule them all? If so... which one?

click_click · « **Reply #10 on:** September 22, 2016, 06:21 »

Quote from: Tror on September 21, 2016, 05:00

Quote from: click_click on September 21, 2016, 01:40
I will lose 30% of my footage sales due to the paragraph 12(1) (W-BEN) regarding Motion Pictures.

May I ask which paragraph you are exactly talking about? I was having a quick look into it but could not find a corresponding text. Paragraph 12 of the double tax treaty between US and switzerland?

In....

https://www.irs.gov/pub/irs-trty/swiss.pdf

I only find this text here:
"Under Article 12, royalties
derived and beneficially owned by a resident of a Contracting State are generally taxable only in
that State." which is actually in your favor!

Honestly: Online based businesses have to stop to incorporate in the USA. Only disadvantages there apart maybe form nicer invoices for US customers. Beyond that: higher taxes, toooooons of paperwork, pissing off suppliers and contributors.

EDIT:
I found a Table on VB stating it is 30% withholding for Motion Pictures for Residents of Switzerland. I could not find any supporting text in the Paragraph 12(1) of the double tax treaty though. Have you asked a tax accountant? Are you a full timer?

Thanks Tror for your input.

Initially I was convinced that it should be 0% tax withholding as I briefly saw that images are definitely 0% and therefore assumed the same applied to footage as well.

According to the list of countries and their respective tax withholding rates from Shutterstock and Videoblocks it does look like that in Switzerland it is 0% for images but 30% for footage.

Nonetheless I am still confused as the PDF from Corbis explicitly states tax withholding rates for Switzerland at 0% for both images AND footage.

That would be just very wrong to treat contributors differently (tax-wise) according to which agency they contribute to...

Doesn't make any sense.

My accountant is on vacation at the moment but I will definitely bother him with that.

click_click · « **Reply #11 on:** September 22, 2016, 06:27 »

Quote from: SpaceStockFootage on September 21, 2016, 06:24

In most places, you can get away with paying tax in your original country, until you've been in the new country for six months. That's why you don't need to pay tax to a dozen different countries if you do a round the world trip for a couple of months. Perfectly legal.

Yes, that would be ok if I was touring the world using my tourist Visa which I could be doing for even a longer period of time than 6 months (as a citizen of Germany and being German for example).

However, I actually moved to Switzerland so I had to get my situation sorted out eventually anyway, so I did it right away. Hopefully it makes me look less suspicious to tax authorities etc. - just trying to play by the rules.

Regarding your other comments:
Yes, I've been looking at the "Royalties" section.

The category does play a role, that's correct. So in my W-8BEN that I filed online on SS for example it automatically states images at 0% and the footage at 30%. I didn't even thave to "think". So it appears to be pre-configured in their tax center database.