I'm an international affiliate agent and I'm trying to register my business to be able to pay taxes in my country. I have a question for US affiliates: do companies that have an affiliate program pay any taxes to the US gov. on the commission sent to their affiliates? Or are affiliates solely responsible for paying taxes?
And a question for both US and international affiliates: how do you handle your taxes? Do you have an LTD type company or do you work as freelancers?
For US affiliates programs, in general, the affiliate program does not withhold taxes from the amount they pay you. However, they do report the amount paid each year to the IRS (US tax agency) in a 1099 form, using the Tax ID you give when you sign up for the program. Under US tax law the affiliate is responsible for paying the taxes himself.