FAQ: What are U.S. Federal Withholding Taxes? | developer.brewmp.com FAQ: What are U.S. Federal Withholding Taxes? | developer.brewmp.com


FAQ: What are U.S. Federal Withholding Taxes?

If your company is located outside the United States and you conduct business with any operator who resides in the United States, then Federal Withholding Taxes may affect the amount of the Developer payment you receive. Qualcomm is required to withhold thirty percent (30%) from payments made to developers located outside the United States and forward such withholdings to the Internal Revenue Service ("IRS"). If your company is resident in a country that has a tax treaty with the United States, then you may qualify for a reduced rate or an exemption from income tax withholdings. To apply for treaty benefits you must provide Form W8-BEN to Qualcomm, in order to:

  • Establish that you are not a U.S. person;
  • Claim that you are the beneficial owner of the income for which Form W-8 BEN is being provided; and
  • If applicable, claim a reduced rate, or exemption from, withholding tax as a resident of a country with which the United States has an income tax treaty.

To complete Form W-8 BEN, your Company is required to have a U.S. taxpayer identification number ("EIN"). If you do not have an EIN, you must apply for one using IRS Form SS-4. This form may be obtained from the IRS web site ( www.irs.gov) or by contacting your tax advisor.

Following are U.S. treaty limited withholding rates for selected countries:
Country U.S. treaty withholding tax rate
Australia 5%
Canada 0%
China 10%
France 0%
Greece 0%
India 10%  1
Ireland 0%
Israel 15%
Japan  0%
Korea (South) 15%
Mexico 10%
New Zealand 10%
Sweden 0%
United Kingdom 0%
Venezuela 10%

1 plus 3% cess (mandatory) & 2.5% surcharge (if applicable)

A developer has a place of business in Mexico and is licensing its application to a United States operator. The developer obtained an EIN and submitted Form W8-BEN to Qualcomm. The developer qualifies for the 10% tax-withholding treaty rate between  Mexico and the United States. Qualcomm invoiced the operator 10,000 USD for developer fees. The operator remits 10,000 USD to Qualcomm. Qualcomm remits 9,000 USD to the developer, and 1,000 USD to the IRS.