Forum Moderators: martinibuster
First, in order to be tax compliant, Google is required to
collect tax-related information from all AdSense publishers.
Therefore, in November of this year we’ll launch an easy-to-use
'wizard' to allow you to submit the necessary information. You'll
need to submit this information by November 30, 2003, in order to
avoid delay of any earnings payments. We’ll be unable to send
further payments to you until your tax information has been
submitted.
For U.S. publishers, this information will include Internal
Revenue Service form W-9, which will be available to submit in
electronic format from within your AdSense account.
If you are located outside of the U.S., or if you would like
further details about the collection of tax-related information,
please visit:
AdSense Tax Information Page
[google.com...]
Your tax information is being collected in compliance with U.S.
tax laws, and will be securely stored, encrypted, and used for
tax purposes only.
ALTERNATE ADS
Second, we've introduced an 'Alternate Ad' feature to your
account. This new feature allows you to monetize your ad space in
the event that Google is unable to serve targeted ads to your
page. From the 'Ad layout code' page, enter the URL of a static
image, clickable image, or ad server, and AdSense will load your
ad instead of Public Service Ads (PSAs). Should you choose not to
specify your own ads, PSAs will continue to be served to your
page.
For more information on the new 'Alternate Ads' feature and how
to take advantage of it, please refer to the AdSense FAQ at:
[google.com...] .
What category would I fall under: U.S. Business, Non U.S. Business, or Non U.S. Business with U.S. presence.
I believe its either the 2nd or the 3rd one. They both seem a little confusing.
I too don't own any property/assets in the US, don't have any American employees (as per the IRS' definition of employees), don't own or operate servers in the US, etc.
Hopefully we fall under 2.
I dont understand why the IRS thinks that just because i host on a US based server, I am liable to pay US taxes. I do it just because a majority of my traffic comes from US and its faster for them to access the site.
Anyway if forced the server moves to India; i just dont think i will b able to manage all the forms and TIN formalities from here...shifting the server will be a easier alternative.
Hope it doesnt come to that though...
Well, IRS is probably thinking if your website is building part of its operation base in the US, then you are liable to US taxes. It's actually logical. You are actually taking advantage of US resources for your business...
No offense. Your explanation is not sound to avoid the tax.
"I do it just because a majority of my traffic comes from US and its faster for them to access the site."
I'm also in a similar situation, and I'm going to make sure all my adsense sites are located outside the US.
May I ask if this is regarded as tax evasion? No offense...
I mean if your site is ALREADY outside US, then i don't see a problem. If your site is right now in the US, then moving outside US to Canada is regarded as tax evasion. Am I wrong here?
The thing is - I'm not american. My business isn't in the US, and all my sites are now hosted in Canada (where I'm based). They've all got Canadian specific content as well.
I don't see how it could be tax evasion. My sites have zero to do with the US, the only thing is I get some money from google each month for showing ads. I don't see how or why I should be charged US taxes..The only thing I could see is being charged Canadian taxes (which of course I will be).
Hopefully google will clarify this all some more.
So, it has nothing to do with where you purchase services, but where income is generated. As a general rule, income generated in a country is subject to that countries income tax. But tax issues are governed by treaty between countries. This means that there is NOT going to be a “standard” that you can count on. Each of you is going to have to determine how to treat the income based upon treaty, USA tax law, and your countries tax laws.
Don’t expect any guidance from Google. They are going to do the minimum required by US law, i.e., collect tax information from you and report your earnings to the USA Internal Revenue Service. It is going to be up to you to figure out how to file and/or report.
In going through the W-8BEN instructions on the IRS site, I found this one line that might be worth highlighting.
"You may want to obtain and provide a U.S. TIN on Form W-8BEN even though it is not required. A Form W-8BEN containing a U.S. TIN remains valid for as long as your status and the information relevant to the you are claiming certifications you make on the form remain unchanged provided at least one payment is reported to you annually on Form 1042-S."
So you don't really need a TIN?
ps - you can tell that Google hasn't really ironed this out, because the TOS seems to mention the W-8BEN, while the url sent in the Google email only talks about the US TIN. I am guesing that the Adsense support email address is going to be swamped with inquiries by tomorrow morning.
[edited by: div01 at 5:19 am (utc) on Oct. 17, 2003]
Then I am confused by your clarification.
According to Google simplified explanation, if you have your websites hosted in the US, then you have to obtain a TIN, which I think will most likely lead you to pay US tax.
In your opinion, if I has a website hosted in US and business in a country w/o tax treaty agreement with the US, then what should I do?
I'm confused by tax law.
To avoid liability, they will say as little as they possibly can about who falls into what categories, and probably the best you will get from them something like "to determine your tax status refer to XYZ at the IRS".
It says if you "engage people" or "have equipment" in the US. We do not run a hosting "service", though we do pay for one. To me this does not include renting server space. If you think about it many websites hosted outside the US will have hardlinks to US hosts anyway for say affiliate codes etc etc.
It just sounds as if eveybody is assuming that hosting on a us server automatically means you come into that secondary category. Personally, I dint see that at all.
A United States (U.S.) business presence involves having employees or equipment in the U.S. that are involved in any way with revenue earned through the AdSense program. This includes, but is not limited to, having a web server or hosting service in the U.S., or having employees in the U.S. who are involved in either:1. setting up a web server, hosting service, or website...
Surely the words I've out in bold must refer to paying for a hosting service based in the US? Or does 'having' mean owning? Then they would have written 'owning'?
A United States (U.S.) business presence involves having employees or equipment in the U.S. that are involved in any way with revenue earned through the AdSense program. This includes, but is not limited to, having a web server or hosting service in the U.S., or having employees in the U.S. who are involved in either.
The part about hosting is confusing me. Does this mean that simply because I host my site in the US I have to pay taxes on Adsense and presumably anything else the site makes.
What concerns me is if I start paying taxes on AdSense then the IRS will be aware of the site and may say well we want taxes on all your other earnings as well.
Well, IRS is probably thinking if your website is building part of its operation base in the US, then you are liable to US taxes. It's actually logical. You are actually taking advantage of US resources for your business...
Well if you take that stand to its logical conclusion then every single business with a ".com" relies on physical server infrastructure in the USA by virtue of the root domain name registry!
Lol I know... I'm no expert... that's just my wild speculation.
I still DON'T KNOW (sorry for the caps) what to file!
"Non-US biz/no US presence" OR "Non-US biz/US presence"
I have a website hosted in the US... my business in Asia. Am I eligible for paying US taxes?
My accountant said yes. I'm liable to US tax, and he simply argued that the fact I have a server in US is already enough for IRS to tax on my revenue. Why? He aruged it's law.
So, I am now consulting with my tax lawyer. Waiting for his reply.
I think this whole thing is just really weird since we can move our server to outside US TOO easily. Some of us even have a backup server running concurrently. That group only has to shut down the US server; and they are no longer liable to US tax from that day on?
Either I'm extremely ignorance or there's a HUGE gap in the internantional tax tax tax law.
I think this whole thing is just really weird since we can move our server to outside US TOO easily. Some of us even have a backup server running concurrently. That group only has to shut down the US server; and they are no longer liable to US tax from that day on?
Agreed :D
I think the best thing to do is to consult your local tax office (they will have to supply you with paper work for AdSense in the end anyway).
I suggest we all do that and report back here.
A webhost is not on your payroll they are a service provider.
Publishers will fall into one of three main tax categories:U.S. Business: The payee is based in, and pays taxes in, the U.S..
Non U.S. Business: The payee's operations related to participation in AdSense are based entirely outside of the U.S., and payee does not pay taxes in the U.S.
Non U.S. Business with U.S. presence: The payee is based outside of the U.S., but has equipment or employees in the U.S. that are involved with payee's participation in AdSense.
I run my own website myself. I live in the UK but I am not a business therefore I don't fall into any of these categories! So does this mean I NEED to set up a UK Business?
Very Confused :(
However, this may have changed (in which case the US hosting businesses can get ready for a major slump!).
Renting space on a web server was considered the same as paying for any service within the US (for example, hiring a US lawyer, or opening a US bank account, wouldn't be considered a "business presence").
Google do seem to be re-inventing the wheel here step by step, pity they didn't hire somebody from (say) some other web ads network or even an affiliate scheme who has some experience of international payments.
Again though things may have changed, the interpretation may have changed, may be different for your country, etc., I'm not a tax lawyer.
I'm based in a country with no tax treaty with the US so it should be fairly clear-cut for me - either a US managed server is considered a US business presence, or not. With previous payments from US companies it wasn't.
[added] The OECD "Clarification on the application of the permanent establishment definition in e-commerce" report of 22 Dec 2000 makes a clear distinction (section 42.3) between a web site and the server on which it is stored. In summary, if you rent web space (even enough space to comprise a whole server, or space on a specific server), that is not an establishment. Owning or leasing your own physical box (i.e. co-location) is more of a grey area but even then it mostly falls under section 42.7 (advertising goods or services).
This definition of "permanent establishment" is what (most) tax authorities and tax treaties look at when deciding whether the mere presence of only a web site served from a country is considered a "permanent establishment" in a country - without it (if that is the only thing) there is no business presence, no business in that country.
So I think the Google bit "This includes, but is not limited to, having a web server or hosting service in the U.S.," really means owning or leasing a physical box, but it looks like they have been advised differently, or just wording it rather broadly.
Again, I'm not a tax lawyer, don't rely on this, etc.
[/added]
[edited by: robho at 10:38 am (utc) on Oct. 17, 2003]
I run my own website myself. I live in the UK but I am not a business therefore I don't fall into any of these categories! So does this mean I NEED to set up a UK Business?
However my earlier opinion stands. My site moves out of US servers, if they decide that i have to get US tax no;...there is no way i will go through the bureacracy of obtaining a TIN no or whatever they want. It would b too diff to clear up everything from half way around the world. Plz note i have nothing against the US govt or the Adsense ppl , but I certainly have a lot to do rather than running around trying to get various numbers and documents. I belv G is right in its own place, as it has to provide the tax ppl with what they want, however it seems out right "dumb" excuse me for saying that if v r expected to pay tax just bcz the server is geographically located in the US. as someone said by virtue of that fact all .com sites could b said to be located in the US.
just hope this is sorted out ASAP..so ppl plz post ur findings; they may be minor or u may think that every1 must be knowing already but it could help...
