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Ask Lane Your Own Question
Category: Financial Software
Satisfied Customers: 12670
Experience:  Highly experienced in professional tax products, Microsoft Office - power Excell user - as well as Windows, Linux & iOS operating systems.
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Filling out the Apple required documentation and it's super

Customer Question

Filling out the Apple required documentation and it's super confusing. Say I am an Australian designer. I'm in agreement with a person in the US to outsource development to them. They get a certain % of the app revenues each month. This is my flow when
I am filling out the information on Apple (iTunes Connect): 1. "Are you a U.S. citizen, U.S. resident, U.S. partnership, or U.S. corporation?" ----> NO 2. "Do you have any U.S. Business Activities? In general, you have U.S. Business Activities if you have
employees in the United States, or own, lease or control equipment or other assets in the United States that you use to derive revenue from the iPhone Developer Program." ----> This is where I am stuck. I have a partner / person in the US that helps me out
with development, but he is not my employee. 3a. If I answer #2, NO, then I have to fill a "Certificate of Foreign Status of Beneficial Owner". Then DONE. 3b. If I answer #2, YES, then "Are you required to file a U.S. income tax return (whether an individual
return or corporate return) with respect to the income you earn from the iPhone Developer Program?" ---> NO? 4. "Are you a partnership? In general, a partnership is the relationship existing between two or more persons who join to carry on a trade or business,
where each person contributes money, property, labor, or skill and expects to share in the profits and losses of the business. In many jurisdictions, a partnership is a legally recognized entity type. If you are classified as a corporation for United States
tax purposes, you should answer "no" to this question. Click here for more information about the definition of a "partnership"." ----> While this seems the most likely scenario, the US developer has set up an "S" corp for his portion of earnings. Gets earnings
from multiple apps. This way he can minimize self-employment tax. I have not set up anything. 5. Whether I answer 4 "YES" or "NO", I still have to fill out a Form W-8BEN: Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding.
You are allowed to fill this information only once and it can't be edited, so it must be correct. Does anyone have any experience with this particular situation?
Submitted: 2 years ago.
Category: Financial Software
Expert:  Lane replied 2 years ago.
You WANT to complete the W-8Ben.
This is what tells the Payor that your are a foreign person and not subject to the withholding, and
You should also document wherever you can that the services are not being provided from U.S. soil.
It's only if one of those two things are true that you will have any tax liability;
(1) a U.S. person (either through US citizenship, green card or substantial presence test)
(2) The income being what's called US source income - meaning that the services were performed ON U.S. soil
This will all be much simpler/cleaner if you do not present yourself as a partner, but rather as having a business relationship (where monies are paid to other entities because they/you are performing a service).
From what you've said, this is not a partnership, a business entity, but rather a joint venture where two or more businesses are working together.
If you simply provide the W-Ben and attach a signed statement that says you a signed statement that say you will not perform any of the services in the U.S there will be no forced 30% withholding.
Let me know if you have questions...
Expert:  Lane replied 2 years ago.
Hi,.Did my answer help?
Customer: replied 2 years ago.
Actually went a separate approach, but thanks for the help. The person in Australia remove our distributions from their taxable income by listing us as 'contractors'
Expert:  Lane replied 2 years ago.
Yes, I think I helped you with that one too..I thought you were asking about the W-8Ben for the Australian entity.That could be important for THEM, so that there's no forced withholding from the payor (apple)