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Double Taxation Document HELP!
Thread poster: William Short

William Short  Identity Verified
Italy
Local time: 22:56
Italian to English
+ ...
Jun 8, 2006

Dear Everyone,

I'm wondering if someone can help me out with a strange document that I need to fill out and hand back to a publishing company here in Italy (Loescher Editore) before they can pay me for a job I am currently doing for them.

The document is a "claim under the double taxation convention" and asks for the stamp and signature of a "Tax Authority"/Fiscal Office in my country of residence (in this case, the USA, since my bank is there). The problem is that if I don't get this document filled out appropriately, they may withhold _30%_ of my payment for taxation.

If anyone has every seen this document before or heard of anything similar, please let me know; I'm totally stumped about what exactly the "Tax Authority" would be (not a bank, I think; the IRS?).

Many thanks in advance!


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xxxBrandis
Local time: 22:56
English to German
+ ...
DTA or double taxation agreement is a very complex matter Jun 8, 2006

It is normally agreed upon, for currencies of lower fiscal value and those with higher to balance the fiscus into the inland. The tax authority may not be able to help you. you need to go to an international tax consultants. They normally possess vast libraries that revised almost once in a quarter year. I know from many foreign students with resticted work permit and top income level ceiling, face this trouble initially. I do not know about the DTA (known as DBA in Germany) between USA and Italy. Best Brandis

[Edited at 2006-06-08 20:39]

[Edited at 2006-06-08 20:40]


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xxxsarahl
Local time: 13:56
English to French
+ ...
US Consulate/Embassy in Italy Jun 8, 2006

Hi William,

Have you asked your local consulate? They'll probably have an answer, or know who has it.

Good luck!


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Marijke Singer  Identity Verified
United Kingdom
Local time: 21:56
Dutch to English
+ ...
Similar situation with agency in Portugal Jun 9, 2006

I had a similar form from an agency in Portugal. I phoned my local tax authorities here in the UK (Inland Revenue = IRS) and they knew all about it and told me to send them the form and they would stamp and sign it and return it in six weeks. Not had it back yet but ...

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Marion Lurf  Identity Verified
United Kingdom
Local time: 21:56
English to German
+ ...
Interesting issue Jun 9, 2006

Hi Marijke,

I'm in a similar situation, a Hungarian agency recently asked me to provide some kind of tax certificate. When phoning Inland Revenue I was told that - according to a new law - they no longer give confirmation of self-employment. I'm starting to doubt now though, maybe the Hungarian agency also wanted this DTA form....?
Did you get yours from the Portuguese agency? What is it called? Maybe you can shed some light on this issue. Thank you!

William, good luck to you, hope you will get your things sorted as well

Marion


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William Short  Identity Verified
Italy
Local time: 22:56
Italian to English
+ ...
TOPIC STARTER
Double Taxation Agreement Jun 9, 2006

Hi everybody, thanks for all your help. Just to clarify:

The document that I have was sent to me by an Italian publishing house for which I am doing some freelance work. The accompanying letter requested that I complete the three-page form, including a part that requires the stamp and signature of the appropriate American "fiscal office". If I do not return this form, the company will withhold a tax advance of 30%.

The document itself is three pages long: the first page asks my name, full address, etc. and has as a kind of title the following sentence:

"Claim under the double taxation convention concluded between Italy and the USA [inserted by me] for a certificate of exemption from tax on royalties"

The second page is a "statement of the recipient of royalties", which I signed, stating that I am a permanent resident of the USA.

The third, and most confusing, page is the "Certificiation of the Tax Authority" confirming that I am, indeed, a resident of the USA. This page is supposed to be stamped and signed by the appropriate office--but an office in the US, not one in Italy. Just that I simply can't imagine that the IRS would bother with such a thing...

Thanks again,

Bill


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Lindsay Sabadosa  Identity Verified
United States
Local time: 16:56
Member (2004)
Italian to English
+ ...
Ah, the joys of US-Italian tax law.... Jun 9, 2006

Hi Bill,
Where do you actually live and pay taxes? You have Italy under your name on Proz as your country of residence which would lead one to believe that you pay taxes there as well. If you are a US resident living abroad you don't have to pay taxes to the US on your income up to the first, I believe, $70,000 you make if you pay taxes elsewhere even though you still have to file. That said, why would you want to fill out this form if you tax home is Italy?
Now, if it's not and you do live in the US, then you will probably have to call the IRS to find out who can stamp this form and where (um... good luck with that - they still can't tell me if they actually processed my tax payment this year. They are so on top of things!).
But that's a little odd regardless because if your fiscal home is the US then it's usually just taken for granted that they won't withhold because the invoice is coming from abroad. Usually they only withhold if you are an employee. Are you signing a "contratto a progetto?" Because if you are, you're no longer a simple freelancer but a consultant for that company and therefore a sort of *employee* and they have every right to withhold (and, in that case, the tax rate *is* usually around 30% - I found that out the hard way once).
Worst case scenario: if the Italian company does end up withholding, you can file in Italy (UNICO, not the 730 and you will get a full refund - BUT it takes three years to get your money back and they will send it to your permanent residence.
I hope some of this helps you!
Best,
Lindsay

p.s. You can call the US consulate to get the names of US-Italian tax specialists but the consulate itself won't help with this (unless someone really nice takes pity on you but usally they just give you a list of people who specialize in this).


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Maria Karra  Identity Verified
United States
Local time: 16:56
Member (2000)
Greek to English
+ ...
form Jun 9, 2006

Dear William,
I've had to do exactly the same thing a month ago for a Greek publishing company (get a form for the double taxation agreement between Greece and the US). The document you get from the IRS is a one-line text, believe it or not. Nothing too complex. You need to send an application form to the IRS, which you download from their website.
I'll give you detailed instructions (the name of the form to send to the IRS, where exactly to send it, and the name/number of the form to request from them) when I get home in a few hours.
Maria


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Maria Karra  Identity Verified
United States
Local time: 16:56
Member (2000)
Greek to English
+ ...
documents needed Jun 10, 2006

Hi again, William.
I wrote my previous response in haste from an airport; sorry about that.

You need to go to the IRS website and download form 8802 "Application for United States Residency Certification".
The form is here:
http://www.irs.gov/pub/irs-pdf/f8802.pdf
and the instructions are here:
http://www.irs.gov/pub/irs-pdf/i8802.pdf

You can either fax or mail the application to the IRS - Philadelphia Service Center. The fax number and the address are found in the instructions.

Question 10 has a list of countries for which you need the certification. I can see Italy on the list (I had selected Greece).

You can request a statement for previous years as well as for the current year (e.g. in question 7 I wrote 2005 and 2006, so I got one statement for each year).

The statement you will receive will look like this:

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
PHILADELPHIA, PA 19255

Date: .....


Taxpayer: < your name >
TIN: < your TIN or SSN >
Tax year: < 2006 or any other year you specified >


I certify that, to the best of our knowledge, the above-named taxpayer is a resident of the United States of America for purposes of the < Italy > - U.S.A. Double Taxation Convention.



Certified for < Italy >


Signature
Field Director, Philadelphia Accounts Management Center



A couple of weeks after I submitted the application I got a letter saying that they're reviewing my information and will be contacting me if there are any problems, and that I don't need to do anything else. A week later I got the statements.

Feel free to e-mail me if you need more information.
Maria




P.S. Note that the IRS will have to look at your tax return forms from previous years in order to verify that you paid taxes in the US. If you need the statement for the current year (for which the IRS doesn't have those records yet), you will need to write in question 11 the following:

William Short (TIN or SSN) is a U.S. resident and will continue to be throughout the current tax year.

You can find information on this (and any other statements that might apply to you) in publication 686
http://www.irs.gov/pub/irs-pdf/p686.pdf
(This is mentioned in the instructions for form 8802; I'm just pointing it out and giving you the link so that you don't have to search for it.)



[Editado a las 2006-06-10 14:12]


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William Short  Identity Verified
Italy
Local time: 22:56
Italian to English
+ ...
TOPIC STARTER
Thanks! Jun 10, 2006

Maria, you're a lifesaver! Thanks for all your help, I really appreciate it!

All the best,
Bill Short


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