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itch.io Community » itch.io » Questions & Support

Confusing TAX, but government wants money!

A topic by SxRobertVN created Jun 24, 2022 Views: 585 Replies: 12
Viewing posts 1 to 3
SxRobertVN2 years ago (1 edit) (+1)

I'm in a pretty strange situation.
I asked for a payment more than a week ago, when I realized the withdraw rate was 30%.
I checked the tax interview option, but I can't send the papers signed because they are based on incorrect informations. The irs.gov site only shows a convention (between USA and Hungary) from 1979! It's clearly not up to date.

 After a few hours of search on the congress.gov I found the latest legit convention from 11/15/2010 wich would protect me from double taxation, and lets me pay my taxes in my own country. Of course, I immediately sent an email to support about the faulty payout/tax rate and attached the actual documents. I haven't received a response yet, but the payout has arrived today, but minus USA tax. I checked the current withdraw rate and it's still on 30%.

I don’t want to blame support, I know they have a lot to do and usually they are very helpful

I downloaded the Receipt and uploaded to my online taxing database, but I've got an email, that the document does not meet the requirements, so I have to pay tax (27%) after my income. Now that I have recieved money from a non-EU country, I have to pay tax after the income that was once taxed. Honestly it's ridiculous I don't know what to do besides having to give up and pay tax once more.

Fortunately, it's not a large amount of money (about 30 USD "clean income" after payment fee and itch.io share). It was the first test, how I can ask for a payout. But now that I think about it... without the interview, will the support change the withdraw rate to 0?
Secretly, I was hoping they would change that after the first transaction. Obviously, I can provide every information they want. But I cant sign a faulty document. (not to mention if I have to start again I have to pay for Tax Identity Verification AGAIN) I really don't want to give up on this site if we can work like partners, I LIKE IT! But I don't want pay double tax either when I have a legit document in my hand.

I'm sorry for the length of the post, I'm realy curious about your opinion.

Reply
leafoPinned ReplyAdmin2 years ago (4 edits)

The tax withholding rate is determined by the information you provided during the tax interview. If you didn’t provide complete tax information, or your tax information has changed, then we can provide you with a link to re-take the tax interview to get an updated withholding rate. If you have nothing to change, though, then the withholding rate will not change.

Since we are a US company, then any US source income is subject to the withholding rate applied to your account. If your buyers are located outside of the United States then that income will not be subject to the withholding rate.

Hope that helps

Note: Please update your title to reflect your question specifically. Topics like “Support not responding” are not allowed as per the rules.

Edit: Moving the solution up here so it’s easier to spot:

I went through and looked through other account from Hungary in our system and I can see that a 0% royalty rate is being applied. I looked at your account’s tax profile and see that you did not provide a tax identification number.

For that reason, you are not eligible for a reduced withholding rate. You must provide your tax number during the tax interview. This is even written directly on our site on the page where you can start the tax interview:

In order to be eligible for a reduced rate you must provide a tax identification number during the tax interview and live in a country that as a tax treaty with the United States.

Reply
SxRobertVN2 years ago

First of all I changed the title. As I mentioned It wasn't my intention to blame the support, I like you all.

Thank you, a link would be good for me, because there is a legit 2010 convention between our countries.
(there is a newer, but that's not yet been ratified by U.S. Gov.)
My problem was that the link in "Tax Infromation"  menu, is pointing to an outdated convention. (Hungary 1979)
I belive that we can work as partners in the future, that's why I indicated this problem.

Question
Can I attach the updated convention documents with the new interview?

Reply
leafoAdmin2 years ago

Unfortunately you can not attach arbitrary documents to the tax interview system. We use a third party to manage a database of tax treaties and apply them appropriately depending on the tax information you provided. This ensures that we are legally compliant with the process. You are not able to set your own rate.

You mentioned the document you are referring to is not ratified. Does that not answer you question as to why our system is unable to provide you with a reduced withholding rate?

Reply
SxRobertVN2 years ago

Thank you for your fast reply. This is more than an unfortunate situation.
With all due respect, I think you misunderstood that.


(The 2010 document is ratified. Only the newer 2019 version isn't.
But the interview relies on the 1979 convention.)

Here is how it looks now:

USA-HUN Convention - 1979    The interview uses this version, but it's outdated!
USA-HUN Convention - 2010    This is the current, legit, ratified convention.
USA-HUN Convention - 2019   Not yet accepted convention.

Can you point out for the third party company that the database is incorrect?
I mean, you're in a business relationship. This is not some misconception of a random user. There is the official government site I linked earlier in the post. They can check it. The point is, I have to tax my income here no matter what! But the law gives me the opportunity and protection to avoid double taxation and pay my taxes in my country.

Reply
leafoAdmin2 years ago

Please check here to see what documents the IRS recognizes for non-default withholding tax rate: https://www.irs.gov/businesses/international-businesses/hungary-tax-treaty-documents

Reply
SxRobertVN2 years ago

Thanks. I just checked it now.
uh... 😦 Can you or a support send me a PM? Or to the email I is registered on my account? I found something on the link you sent me! A little bit worrying. But I prefer not to write that here until we find out what's going on. 🤨

Reply
leafoAdmin2 years ago

You can send in a support ticket from https://itch.io/support and then reply to my post with the ticket ID and I can look.

Reply
SxRobertVN2 years ago

I sent a ticket "120468". 
And thank you. Especially  for your hard work and patience. I know it's hard to handle people like me. 🙂

Reply
leafoAdmin2 years ago (1 edit)

I went through and looked through other account from Hungary in our system and I can see that a 0% royalty rate is being applied. I looked at your account’s tax profile and see that you did not provide a tax identification number.

For that reason, you are not eligible for a reduced withholding rate. You must provide your tax number during the tax interview. This is even written directly on our site on the page where you can start the tax interview:

In order to be eligible for a reduced rate you must provide a tax identification number during the tax interview and live in a country that as a tax treaty with the United States.

Reply
SxRobertVN2 years ago

I did not send back the inteview for the reasons I mentioned in the email.  But I see what's the problem then. I have to contact my local Government office about this. We have a bunch of ID numbers. Health care, pesonal ID etc. (not one universal ID) I have to ask them about specific intenational TIN. I trust in your and Treasury Department's system more than ***'s.  🙂 so I will send back  the signed paper this time. However, it is interesting how they handle database.  I wonder if they will respond to my email. In theory, they have a 20-day response time. Well... I think we can  count this post closed. Thank you again! Your attitude and helpfulness was outstanding. 10/10
I will provide the necessary information as soon as I can.

Reply
No Time To PlayModerator2 years ago(+1)

I've let an admin know.

Reply
SxRobertVN2 years ago

It's very kind of you. Thanks!

Reply
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