FAQ: What are Foreign Withholding Taxes? | developer.brewmp.com FAQ: What are Foreign Withholding Taxes? | developer.brewmp.com


FAQ: What are Foreign Withholding Taxes?

If you do business with any operator located outside the United States, then Foreign Withholding Taxes may affect the amount of the Developer payment you receive. The operator, on behalf of its local tax authorities, may be required to withhold taxes on developer payments made to Qualcomm that are passed through to you. The applicability of foreign withholding taxes is highly dependent on facts and circumstances. The country of your Company's domicile, the country the operator is located in, whether Qualcomm maintains a legal presence in the operator's country, along with other factors may influence whether or not you will be subject to foreign withholding taxes.

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 the United States, and is licensing his application to a Korean operator. The tax-withholding treaty rate between Korea and United States is 16.50%.
Index Rate on January 1st (1,800 WON = 1 USD)
Index Rate on March 1st (1,800 WON = 1 USD)
Qualcomm invoiced the operator 1,800,000 WON on January 1st. On January 1st 1,800,000 WON = 1,000 USD (per index rates listed above). On March 31st the operator remits 1,503,000 WON (1,800,000 WON - (1,800,000 WON * 16.50%)) to Qualcomm, and 297,000 WON to the Korean tax authorities. On March 31st 1,503,000 WON = 835 USD (per index rates listed above). On April 15th Qualcomm will issue a check to the developer for 835 USD, NOT 1,000 USD.