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...] .
I am currently hosted on a Canadian server - so I'm Ok - or does that mean the Canadian government will want a piece of me!
If you are in Canada, the Canadian Government will want some of that, regardless of whether you are hosted in Canada or not. It is still taxable income in their eyes.
Jenstar
Should have been clearer - I'm not in Canada - I'm not Canadian - my site just sits on a Canadian server.
Just to go slightly off topic for a moment - I remember reading an article recently about the Spanish government introducing new laws regarding taxing internet income - I'm sure part of it mentioned that even hosting your site on a Spanish server was enough to trap you in the tax net.
Anyway - in my opinion, any government who introduced such a law would be BARKING MAD!
For example - If this thing about the IRS turns out to be true, what would it achieve - absolutely nothing - the IRS wouldn't raise a cent in extra tax revenue.
All the non-US citizens would simply move to a new server - the only thing that would result is that the US hosting industry would be hammered - resulting in LESS tax revenue for the IRS
If all the major countries in the world start to unite on a policy like this, you can guarantee that there will be a nice industy spring up for 'offshore' hosting - there will always be a nation out there who will keep their laws tax friendly so they can take advantage of a great business opportunity like this.
All the non-US citizens would simply move to a new server - the only thing that would result is that the US hosting industry would be hammered - resulting in LESS tax revenue for the IRS
I tend to agree with this. People would find hosting elsewhere if this kind of inane rule prevailed. But surely this issue would have come up before, with Amazon, Fastclick or others if there were any credence to it?
SN
Never mind some offshore hosting haven. Youre always liable to be taxed SOMEWHERE, usually in your country of residence. So you can always host where you life without any hassle, since youre paying taxes there already.
.. except if in your country you have to pay $300/month per 64k pipe of international bandwidth ;)
My point is that when you are self employed (or similar), you know that there will be more paperwork. This shouldn't come as a surprise.
I don't have an accountant nor a tax lawyer, but if you have either of these, they should be able to sort it out for you.
Has anyone emailed Google about this? I'll do it, and tell them that it's on behalf of a lot of people her at WW.
I emailed them yesterday to clarify what they mean by "web server" and "hosting service". No answer yet.
As I mentioned long ago in this thread, the OECD covered this (for the purpose of international tax treaties) back in 2000, the situation is totally clear cut legally: if you only rent web space in a country (and have no other business or presence in that country) you are not liable for any taxes there, period. (there are a couple of exceptions, Spain is one). Owning your own equipment is a different matter.
However, if Google wish to interpret this differently the choice is to fill out a great deal of US paperwork (which still won't result in any taxes in most cases as it is exempt, but will be time-wasting), or make sure the server is not in the US (just to keep Google happy so that we can sign the right form for them, NOT because there is any legal or tax reason).
Hopefully Google will clarify that by "web server" they mean physical equipment you own or lease, and by "web hosting" they mean you run a web hosting business for others (i.e. have some other US business). Any other interpretation would be different from all other US ad networks and affiliate schemes I'm aware of.
I did read your earlier input about the OECD but you implied that it could have changed because this was back in 2000. With the speed of change in this industry, I guess it's quite likely that rules have been changed in the last 3 years.
I also expect to fill out a lot of paperwork but I don't envision having to pay more taxes than I already do.
But it's all speculation untill we get some facts from Google or the tax authorities.
It can take up the issue of collecting tax for each individual account directly and then submit it according to the country and various rules.
I know it's something which is our headache but it would be wonderfull to have google deduct tax and submit according to law.
Google ,You are a wonderfull company this will go a long way in taking care of (us) publishers. :)
Ps:Those publishers who wish to submit taxes themselves may be allowed to opt out.
Also after all this is over when will google send the check.
That is my main concern. Google may be going against its own policy of paying
within 30 days of the end of every calendar monthby instituting this new requirement of not making a payment until the new form is filled out. They say we will get the new forms in early November. Early november could mean the first of the month or it could mean the the 10th of the month (just as an example). And then, how long after we get the chance to fill out the form will it take for them to make the payment? Seems like the *within 30 days* will probably end up being hogwash this time around. I would be more than happy to give them my tax id right now to avoid having to wait, but I'm not being given the option to do so. I was anxiously looking forward to my first check from them, but now I guess I'll have to wait a little longer.
I don't have an accountant nor a tax lawyer, but if you have either of these, they should be able to sort it out for you.
I have found that because the internet is so new many lawyers even the high end ones tend to do research and charge you for time and copies or what is somewhere on the net anywhere.
What bothers me the most here is that if it is the case that you have to pay money to the IRS (something I am sure not many are happy to do) for your AdSense revenue then logically that should also apply to all other revenue the site generates. That is what worries me the most.
I have no objections to paying money where I am on the revenue the site earns but I do not want to start paying the US tax system anything.
To keep this away from being polictical which is not what I am trying to be I will say that the level of tax I pay in my companies country is less than that I would have to pay in the US.
Plus what happens if you have two sites one hosted in the States another hosted in Europe with the same AdSense account, what sort of nightmare would that be for the tax man and for you (a website publisher)!
EDIT IN - such complications to your tax, only benefit one person - mainly your accountant. The additional costs that you will need to pay your accountant to manage such a complicated system, I imagine would be reasonable.
I hope it works out for you.
I run a website that serves Google Adsense, these adverts will provide me a small income each month. I am a UK citizen, and am based in the UK, however I pay for my website to be hosted on a server in the US. Does this
make me liable for tax in the US, or just the UK, as I was expecting?
They responded with:
<snip>
[edited by: Jenstar at 11:36 am (utc) on Oct. 21, 2003]
[edit reason] Sorry, no email quotes please, as per TOS [/edit]
If a foreign person was selling electronically through a website on a server located in the U.S., then this generally would be considered as having a taxable presence in the U.S.
Am I selling anything (electronic or tangilble) by putting up an Adsense ad? Does a "click" = "sale"? If the Adwords advertiser converts one of my clicks with a sale, then he or she might be liable for taxes.
I suppose you are selling ad space.
If you were based in the UK with a US server and you sold ad space or anything to a UK client who would even think that the IRS would be due some money?
But as the disclaimer from mcavill posts say this is not an official ruling from the IRS.
[edited by: Dayo_UK at 4:19 pm (utc) on Oct. 20, 2003]
SN
the ads STILL come from the GOOGLE SERVER in the USA. Does that constitute a taxable presence?
Good point.
I am surprised that the IRS "unofficial" response was web *hosting* is considered a presence. I thought perhaps the line would be drawn between regular web hosting and actually owning the server.
I can see why Google doesn't want to be giving much more advice that what they currently giving, from a liability aspect. Many online programs are the same, they don't want their advice misinterpreted and end up being sued.
I think it would be wise to get the opinion from a non-US tax office. I am still waiting for the answers from a couple of emails I sent out.
They have CONFIRMED that ONLY using a third-party US web hosting service to host your web pages, renting web servers in the US, or having your payments sent to a US post office box or forwarding address, is NOT a US presence - so if those are the only US connections, you are considered a Non-US business WITHOUT a US presence. No need for Tin numbers, tax returns etc, they'll just provide a form to declare this.
However if you OWN your own US server, or have anybody in the US working with the site, that MAY be considered a presence (non US business with US presence).
They'll have a system to walk thru the options in early November, but basically for those of us whose only US connection is to host there on a rented server there's no need to worry: it'll be like all other ad networks / affilates, i.e. nothing to do with the US.
They do of course note that none of this should be construed as legal or tax advice as everybody's situation may differ. The same applies to this message also - ask your own advisers if in doubt - but for the majority of us outside the US it clarifies that it is the same as normal.
And thanks for sharing this, robho.
if my website is hosted outside the US, the ads STILL come from the GOOGLE SERVER in the USA. Does that constitute a taxable presence?
Assuming that Google own their server, it IS a taxable presence - for Google. The ad is (literally) their business.
The website it appears within is (our) business, so if a foreign-owned website does not have employees or (owned) equipment in the US it does not normally have a US presence.
you should know that my answer does not constitute an official ruling by the Internal Revenue Service (IRS), and it should not be used as such.
Of course the IRS guy believes that we should pay American tax! How do you think he gets a pay rise of promotion? By bringing in money...
It seems that internet marketing like AdSense is a very grey area in regards to taxes. I'm sure there is more confusion to come...
