How to Fill Out the W-8BEN Form?

In 2009, first the stock bank Shutterstock, and by the end of the year other major stock banks like Fotolia, Dreamstime, and Depositphotos began acting as tax agents for their authors. How did this manifest? These popular stock banks started withholding taxes from image sales.

You might exclaim, how can this be? I pay taxes on this income in my country!? But unfortunately, many countries still have not entered into treaties with the USA for full avoidance of double taxation, so microstockers’ earnings are taxed by the stock banks at rates ranging from 5% to 30% in favor of the American budget.

You can familiarize yourself with the complete list of countries that have treaties with the USA for avoidance of double taxation, as well as the withholding tax rates on the Shutterstock tax page. Alternatively, just look for the section named Tax Center on other stock banks’ websites to find all the necessary information.

What is the W-8BEN form?

Now, if you are not a US resident and want, for example, to ensure that the Shutterstock stock bank does not withhold taxes from you at the maximum rate of 30%, you simply must fill out the electronic W-8BEN form (Group A2). This form will be used by the Shutterstock stock bank for tax reporting to the appropriate authorities in the USA.

By the way, after filling out the W-8BEN form, the tax withholdings by Shutterstock will be applied only to those sales made to US citizens (U.S. source income). Until you fill out this form, Shutterstock will withhold taxes from all sales. So, don’t forget about this!

Yes, and in general, if we look at the level of withholdings, it can be seen that for citizens of Russia and some former Soviet republics (for example, Armenia, Azerbaijan, Belarus, etc.), there will be no tax withholdings, as the withholding rate for these countries is 0%. For citizens of Ukraine and the Baltics (Lithuania, Latvia, and Estonia), tax withholdings will be applied at a rate of 10% (I remind you that taxes are only withheld from sales to US residents).

Yes, I would also like to clarify that the withholding of tax by Shutterstock does not mean that you can avoid paying taxes in your country. The income tax remains the same.

To assess what proportion of your sales come from American buyers, you can visit http://submit.shutterstock.com/payment_history.mhtml?ref=3512 on the Payment History page.

Now, let’s go over the W-8BEN form itself to understand how to fill it out. Essentially, filling out this form is quite simple; you just need to be attentive.

Instructions for Filling Out the W-8BEN Tax Form for Shutterstock

• In your account (Your Account) on the Shutterstock stock bank, you first need to check the correctness of the previously entered information: Last Name_First Name_Patronymic, postal code, and address. If the information was entered incorrectly, it needs to be corrected and you should wait for it to be verified (about 1-2 days).
• Then you will need to go to the Tax Center section, select the option submit Form W-8BEN. Fill in the required fields with the necessary information:
  • p. 2 here you write N/A;
  • p. 3 here you choose Individual;
  • p. 4 this field will already be filled with the address from Your Account;
  • p. 5, 6, 7, 8 – leave blank;
  • p. 9 – already selected a and b, in point a the country of residence (Russian Federation) is already entered;
  • p. 10 – this field is already automatically filled;
  • p. 11 – leave this field as is (do NOT check the box);
  • at the very bottom of the form, you will need to write Last Name First Name Patronymic just as it is written in p. 1 (instead of a signature).

After successfully completing the W-8 BEN tax form in your account on Shutterstock, in the Tax Center section, you will see the message “Your submitted W-8 BEN has been approved” in a couple of days. That’s it, the form is accepted. Work with the Shutterstock stock bank in good health!

Below in the illustration, I provided an example of filling out the W-8BEN tax form for Shutterstock: