Shutterstock IRS Withholding Taxes for non U.S. Submitters

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From shutterstock email and forum:

To All non-US Submitters:

Letters are being emailed to all non US submitters individually today, advising of possible changes in the amount of tax that will be withheld from your Shutterstock earnings.

If you are a citizen or resident of the United States living abroad, please provide us with a signed, completed U.S. Internal Revenue Service (IRS) Form W-9, Request for Taxpayer Identification Number and Certification.

If you are a resident of a jurisdiction which has an income tax treaty with the United States that provides for a reduced rate of withholding tax on royalties, you will need to complete U.S. Internal Revenue Service (IRS) Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. We are in the process of installing an online version of Form W-8BEN, and we will notify you when the online form is available. However, in order to complete the form you must have a U.S. Individual Taxpayer Identification Number (ITIN). If you do not currently have an ITIN, you can obtain one by filing a Form W-7, Application for IRS Individual Taxpayer Identification Number, with the IRS. This process takes only 4-6 weeks and could reduce your withholding taxes significantly.



Please refer to your personalized letter and the below information for more details.

Thank you.
Shutterstock

Full article http://submit.shutterstock.com/forum/abt62243.html

——————————————

Founder/CEO answers:

P.S.: the controversial post is no more present in the main ANNOUNCEMENTS section and  it was later replaced by a less strong version; if you follow the link you can find the second one, I copied here the first version…

Witholding Tax Issue – Calm down.

Okay.

1) This is a US government regulation. What would you like us to do about it? Go to jail? Go out of business? We are sorry – but we can't just move the company out of the US or creating another company somewhere else to pay you. That is called tax evasion. These are laws. We can't change the laws. We have 60 employees in NYC – they aren't going anywhere.

2) If you follow the rules you won't be double taxed. Your country has rules that we follow every day also. You may need to do a bit of work here, but we will help you out with them. You will have a chance to get your ITIN before we start following regulations and witholding.

3) If you don't want to deal with this, then leave. We are happy to remove all your images for you. If I continue to read threads on the forum that you will be taking your images elsewhere, I will delete them myself and close your account. I've done it a few times already- I am not kidding about this.

4) Online petition claiming we are taxing you? Why would we be taxing you? Again, this is the US government. We are just following the law.

5) Want to change your avatar to something obnoxious? Again, I will personally delete your profile, images, etc. You are just creating more work for us.

6) If you think other microstock companies are except from paying tax, think again. It's a matter of time before they start following the law also.

7) Why don't US citizens have to deal with this? Because we already have their W9 forms. Don't worry – they dealt with it also.

8) Welcome to doing business internationally. We will all make money together – but we have to follow the rules.

9) We will answer every single question you have – but you have to give us time to get to them.

Jon Oringer
Founder/CEO
Shutterstock Images LLC

Full article, new lighter version,  http://submit.shutterstock.com/forum/abt62351.html

P.S.:
Follow “Shutterstock & IRS – updates, answers” on NiltoMil blog:

http://www.niltomil.com/n2m/shutterstock-irs-updates/

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About Author

I write about the stock photo and microstock industry since 2006 on my several online-magazines. My goal for MyStockPhoto is to teach photographers and stock photographers how to sell more photos and earn money with their photography hobby.

  • Thanks for starting a discussion here as well. I have posted one to NiltoMil here with some links & answers:
    http://www.niltomil.com/n2m/shutterstock-irsshutt

    I hope as many people can get this taken care of as possible!

  • Yeah we all at SS saw it, really kind feedback for working community questions

    • Yes, I think shutterstock could say the same things in a a polite form…

  • Step

    i just think ss is asking people to pay their taxes

    • I don't know, they said "This is a US government regulation"

  • Per eventuali lettori italiani, Vi suggerisco il post di Milacroft su questo tema
    http://brandelli.wordpress.com/2009/05/28/era-tro

  • Ancora per i lettori italiani, qualche – non semplice e di immediata applicazione – informazione aggiuntiva qui, thanks g2studio Giuseppe Parisi
    http://submit.shutterstock.com/forum/viewtopic.ph

  • neil harrison

    shutterstock have now resorted to censorship on their forum to try and silence the large number of unhappy contributors. There seems to be a wide spread misconception that you either have to
    a) accept the new rules and try and wade through the paperwork, and or simply lose your 30% because you live in the wrong country or don't manage to complete the paperwork
    b) pack in and leave shutterstock
    There is a 3rd way, and that is put pressure on shutterstock to take ownership of this issue, by threatening to remove all or part of port, in a mass move. There is a petition with a huge number of files threatened available for signature
    http://www.gopetition.com/petitions/say-no-to-us-
    for anyone who wants to make shutterstock take the ownership of the problem. there are many ways that shutterstock could solve this problem themselves. they have the resources and the wherewithall.

  • Follow "Shutterstock and IRS – updates, answers" on NiltoMil blog:
    http://www.niltomil.com/n2m/shutterstock-irs-upda

  • I think someone mentioned it already on the SS forums, that in many parts of the world, this kind of communication (CEO rant version one) from the top management would not be tolerated. For any public company doing international business, this kind of behaviour would be seen as a PR disaster. Basically it is showing no respect to the people who in the end built the company. When you're having 170k photographers submitting 80k images each week, it seems you dont need to be polite and professional anymore.

    About the whole tax issue, i'll have to wait and see if this is going to affect microstock photography in general or will it remain just SS issue.