Tax Question for on-line sales out of the US

[GomiGirl]

Got a question.

If I were to have my products sold out of the US, say, on a download site, what sort of tax treaties are applicable for withholding tax?

I was aware the there was a tax treaty between the US and Japan now so that with-holding tax is no longer levied. If this is the case, are there some forms that need to be submitted to ensure this?

I was aware that there is no treaty between HK and Japan but there is one for US, UK etc.

I am no tax expert so I was hoping for some anecdotal words of wisdom while I wait for my tax guy to come back with an answer for me. I just can't wait over the weekend for some discussion on this.

[Kuang_Grade]

This seems to detail the structure of the recent US Japan tax treaty and goes over some examples, although I'm not with it enough on corp. tax lingo to parse it out fully.
http://www.kpmg.or.jp/resources/newsletter/tax/taxnl200404_e.pdf

This pretty glibly goes over some points but doesn't have any details
http://www.venturejapan.com/new-us-japan-tax-treaty.htm

I make no claims on tax expertise, but I suspect that your administrative burden will be pretty light, given that US federal and state tax agencies tend to focus more on overall income vs. actual goods sold (except for gasoline, tobacco, and a handful of other goods) and there are no VAT issues to deal with either. But, like I said, I'm not expert and sales of non tangible items are handled differently in some areas vs. others (ie, is software a 'thing' or is it a 'service', since you actually don't possess the code only a limited and revocable right to use it.)

With the upcoming launch of the apple app store, I suspect you are not the only one with this question on their mind and this might point you in the right direction.
http://blogs.oreilly.com/iphone/2008/06/quick-tip-for-nonus-iphone-dev.html

[GomiGirl]

Kuang Grade - YOU are a LEGEND!!!!

Thank you thank you thank you!!

[American Oyaji]

Kuang Grade - YOU are a LEGEND!!!!

Thank you thank you thank you!!

Most of the long timers on here are a legend in one way or another.

[halfnip]

This seems to detail the structure of the recent US Japan tax treaty and goes over some examples, although I'm not with it enough on corp. tax lingo to parse it out fully.
http://www.kpmg.or.jp/resources/newsletter/tax/taxnl200404_e.pdf

This pretty glibly goes over some points but doesn't have any details
http://www.venturejapan.com/new-us-japan-tax-treaty.htm

I make no claims on tax expertise, but I suspect that your administrative burden will be pretty light, given that US federal and state tax agencies tend to focus more on overall income vs. actual goods sold (except for gasoline, tobacco, and a handful of other goods) and there are no VAT issues to deal with either. But, like I said, I'm not expert and sales of non tangible items are handled differently in some areas vs. others (ie, is software a 'thing' or is it a 'service', since you actually don't possess the code only a limited and revocable right to use it.)

With the upcoming launch of the apple app store, I suspect you are not the only one with this question on their mind and this might point you in the right direction.
http://blogs.oreilly.com/iphone/2008/06/quick-tip-for-nonus-iphone-dev.html

I am too lazy to go over everything, so my apologies in advance, nor have I been up to date on the US' crazy fucked up tax scheme either. I, however, was on the phone with the IRS a few months back and the agent told me that the US and Japan does NOT have a tax treaty in place so I did have to claim income earned in BOTH countries. As some of you may know, I am a dual cit, so he was insisting that I claim income earned under my Japanese name and income earned under my US name and get taxed based upon this. He did state that there were other forms that I can fill out to help minimize the amount that I would be taxed, but he went on stating that since I was dual, this was the case.

I, of course, then hung up immediately, filled out the appropriate forms (I'll let you figure out what I did) and filed, but this was just what I was told by the IRS direct.

Again, this is most likely different in the corporate sense, but I found it strange that this guy would say something like that, as it's not like they're not taxing me up the arse as it is in the first place..

[GomiGirl]

Spent the last few hours on the phone with the IRS getting my EIN number and the W-8BEN forms in. Seems to be all OK.

Thanks for the help.

[kamome]

I, however, was on the phone with the IRS a few months back and the agent told me that the US and Japan does NOT have a tax treaty in place

That makes no sense at all. There is a tax treaty in place and is effective for tax periods beginning on or after January 1, 2005. The text of the treaty (and supplemental guidance) can be found here:

http://www.treas.gov/offices/tax-policy/treaties.shtml#japan

[Greji]

Spent the last few hours on the phone with the IRS getting my EIN number and the W-8BEN forms in. Seems to be all OK.

Thanks for the help.

If you really run in to a wall (which I know you frequently do anyway), let me know.

My mate is the former (and last) IRS attache from the US Embassy in Tokyo now retired in California. I'm in constant contact with him as he was helping my son when he first arrived in LA. He's not "geneki', but stays on top of the biz and in contact with his former IRS colleagues.

He's a good guy and would be willing to help for a pint or two when he drops in to town (He's married to a local rice cooker and drops by quite often).

[halfnip]

That makes no sense at all. There is a tax treaty in place and is effective for tax periods beginning on or after January 1, 2005. The text of the treaty (and supplemental guidance) can be found here:

http://www.treas.gov/offices/tax-policy/treaties.shtml#japan

Now you know why I hung up when they put me on hold...

[GomiGirl]

If you really run in to a wall (which I know you frequently do anyway), let me know.

Thanks mate - I appreciate the offer. It seems to be all fine and dandy at the moment, but if it goes pear shaped I shall drop you a line.

[Greji]

Thanks mate - I appreciate the offer. It seems to be all fine and dandy at the moment, but if it goes pear shaped I shall drop you a line.

Drop me a line my arse! You'll show up in person and buy me the sufficient amount of pints to suffice for a bribe....

[GomiGirl]

Drop me a line my arse! You'll show up in person and buy me the sufficient amount of pints to suffice for a bribe....

OK - if you ever come over my side of town you are on!! I rarely get over to the financial district.. the wanker bankers give me hives. (jokes)

[Greji]

OK - if you ever come over my side of town you are on!! I rarely get over to the financial district.. the wanker bankers give me hives. (jokes)

Chicken. Well I guess if there's a shout in it....