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Tax information for hobbyist game developers from Germany / EU

A topic by Wend1go created Jul 19, 2018 Views: 423 Replies: 5
Viewing posts 1 to 6
(3 edits) (+2)

Hi fellow game developers,

I'm a freetime game developer from Germany that has a regular fulltime job as an employee.
Guess this is true for a lot of us here on Itch so I guess others have already gone through the same trouble I'm currently facing and might be able to give some advice to people like me who are new to this business.
I read firecats articles but unfortunately they didn't really help me much. I am an individual so I figured that I need an ITIN number since I don't run a business in Germany, I haven't got a German equivalent to a US tax Id.
Unfortunately the W8BEN-I form is very hard to understand for someone that isn't a native English speaker and Google Translate is pretty bad at translating words / sentences without much context.

I don't want to do anything wrong so it would probably be wise to ask a tax consultant but I honestly don't expect to earn more than 20$/€ per year so I fear a single appointment would cost way more than I would ever earn by selling my game. So I have chosen the route of least resistance and picked the 30% tax option although there wont be much left from a $ after 30c Paypal + 30% tax and 10% Itch.
So I'd be interested to hear from others who have successfully managed to file the tax form. Maybe someone from the Itch support might also give some advice.

Thank you in anticipation. :)

I'm not from Germany, but I have the same doubts about it. 
For the moment I opted  for just not collecting the money, as any other path would cost more money that what I would potentially earn in 1 year.
And there's no "free" way to pay taxes in my country for sporadic sales, as the one's I receive. You'll have to pay a base fee on a monthly bases whether or not you've earn something.

Anyways, I'd like to read what others have to say about this

Cheers!

(2 edits) (+1)

Ok after looking through online and talking to some in the freelance community, i have confirm information:

- Your full name, street address, and country you live in ( numbers 1-4)

- You then use your ITIN in 5, only fill 6 if you do not have ITIN that spot is like your "SSN" like thing in your country. (ask someone for advice for 6).

- Do not fill in 7, its is said this one is for the person who give you the W8BEN-I

- Birth of date on line 8.

- 9 Fill in your country name; in this case it would be Germany.

Note: Germany has tricky laws that i found when looking for its us tax treaty, you are not require to do them.

- 10 This one is crazy to find any kind of information but this is the TLDR version of it:

add the article number in which the tax treaty is, then add the % and lastly on that big line add "services"

I do not know germany article number i'm sorry  I looked and looked but its not easy to find (one claim its Article 12.1 for 0%).  Services because itch.io is the one providing it (i know its confusing don't think about it much).

- [No number section; last big fill in] you can say anything here, its better to explain what you plan to do.

- [sign here] sign and date, do not sign the bottom-most right found below the date information, that is for someone else.

Oh and give it back to the person who give you the W8BEN-I, DO NOT MAIL IT TO THE IRS

(+1)

Hello firecat,
thank you for the time you have spent on getting those information, this is very much appreciated. BIG thanks!
I have redone the tax interview and now it says "Withholding rate 0". The tax interview abstracts the form and takes you through it step by step. You only get to see the actual form (filled out) after answering every question of the interview. Looks like the important part was "6". I thought that I would have to check the box that says that I don't have a TIN or an equivalent of it which took me to the wrong follow up page of the interview. After stating that I have one, I was able to enter my German "Steuernummer" (equivalent to SSN in the USA). There was a ckeckbox to mark the number as a SSN but it could only be marked as checked if I had entered it into the US citizen related field but my German number was accepted in the foreign number field and I was finally able submit the form. Puh!

I read that in Germany there is a rule that if you only earn up to 410€ per month in addition to your main job it is sufficient to note the amount on your annual tax declaration form. Only when you exceed the amount, you need to found a "Kleingewerbe" or a company.
Since I don't expect to earn that much that should be all I need to do in order to comply to the law.

Well, from what I now know about Australian Tax rules - the game project does not even exist, unless it has at least 1 sale. Fun hu? 

Loop-hole, (but not really, because I can understand why the rule exists):  Sell a copy. 

I thought I'd add my two-cents as I also recently had to fill in the tax questionnaire (I decided to start accepting donations).  I am individual from the UK, so obviously this does not address the German side of things, but might be useful to anyone going through these gruelling questions!

Same comment on the ITIN as pointed out by Wend1go.  TIN stands for Tax Identification Number and the questionnaire accepts your local country tax code.  In my case in the UK, this was my UTR (Unique Tax Reference).

Re-declaring income, I believe things work the sort of the same in the UK as Germany.  Assuming you are employed and game making is a hobby, there is a tax exemption for additional income made from side activities.  Best to check with an actual accountant, but anything under a thousand pound should be tax-free.  In my case I actually created a LLC with its own UTR.  I am self-employed and planning to have game development as a secondary income stream, so this made more sense for my situation (but was a bit more complex to setup!).

On a side note, I'd encourage anyone planning to actually selling game to set up a LLC, as it protects you as an individual.  Chances are very low, but some AAA company could decide to sue you for copyright infringement or whatnot (happened to notch in the early days of Mojang), so it's better they sue your company - not you!