Outsourcer requiring pricy IRS certificate, as condition of cooperation.
Thread poster: Gabriella Vento

Gabriella Vento  Identity Verified
United States
Local time: 09:06
Member (2015)
Hungarian to English
+ ...
Aug 7, 2016

A few days ago I was accepted for cooperation by a major reputable US based translation company. (more exactly an international company with office in the US)
I signed the usual paperwork, contract, NDA, submitted copies of diplomas and other certificates. As a last step, I was asked to submit an IRS Certificate of Residence form, in order to be VAT exempt. (Form 6166), which had to be requested from IRS by filling up Form 8802. This form comes with a fee of $85 to be paid for IRS. Link: https://www.irs.gov/pub/irs-pdf/i8802.pdf
I had to cancel the contracting process. This is the first time, I see such a requirement, it just does not feel right
I would like to know, if this is normal? There should be an easier way to prove, we pay taxes in the US, like the regularly used W-2, which is free of charge.
Did any of you met a similar requirement in your daily dealings with outsourcers?
What is your opinion?

[Edited at 2016-08-07 04:10 GMT]


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RobinB  Identity Verified
Germany
Local time: 18:06
German to English
Absolute nonsense Aug 7, 2016

Gabriella Vento wrote:

A few days ago I was accepted for cooperation by a major reputable US based translation company. (more exactly an international company with office in the US)
I signed the usual paperwork, contract, NDA, submitted copies of diplomas and other certificates. As a last step, I was asked to submit an IRS Certificate of Residence form, in order to be VAT exempt. (Form 6166), which had to be requested from IRS by filling up Form 8802. This form comes with a fee of $85 to be paid for IRS. Link: https://www.irs.gov/pub/irs-pdf/i8802.pdf
I had to cancel the contracting process. This is the first time, I see such a requirement, it just does not feel right
I would like to know, if this is normal? There should be an easier way to prove, we pay taxes in the US, like the regularly used W-2, which is free of charge.
Did any of you met a similar requirement in your daily dealings with outsourcers?
What is your opinion?

[Edited at 2016-08-07 04:10 GMT]


You are presumably resident in the United States, right? In that case, you have nothing - and I mean absolutely nothing - to do with VAT, which only affects businesses resident in the EU. You cannot be "VAT-exempt" because you will never be a VAT taxpayer in the first place.

This translation company may be "reputable", but they're also laughably ignorant. Just remind them that you're a US business, so VAT isn't your problem. One question you have to ask is whether you really want to work for such a bunch of amateurs....


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liviu roth
United States
Local time: 12:06
Romanian to English
+ ...
concur with RobinB Aug 8, 2016

[quote]Gabriella Vento wrote:

A few days ago I was accepted for cooperation by a major reputable US based translation company. (more exactly an international company with office in the US)

You reside in the US, you work in the US, you invoice in the US the US office ... why on earth do they need the VAT exempt is beyond my comprehension. Let them know that after consulting with your tax adviser you were told not to file unnecessary forms.


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Gabriella Vento  Identity Verified
United States
Local time: 09:06
Member (2015)
Hungarian to English
+ ...
TOPIC STARTER
Thank you Aug 8, 2016

Robin and Liviu, thanks for your insights!

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Katalin Horváth McClure  Identity Verified
United States
Local time: 12:06
Member (2002)
English to Hungarian
+ ...
Spanish agency? Aug 8, 2016

I have seen posts about such requests from agencies located in Spain. Perhaps that is the case: even though they have an office in the US, they are still planning on issuing payments from their main office in Spain?
That is what you need to clarify.
By the way, the IRS form you need to submit for outsourcers in the US is the W9, not a W2. W2 is totally different. That would be issued TO YOU by a company that employs you as an employee, not as a contractor.
US outsourcers require you to send them the W9, and then they issue you a form 1099 at the end of the year if your earnings from them was above the limit.

Here is one link to a past discussion, I am sure you will find more if you search:
http://www.proz.com/forum/business_issues/61970-is_a_certificate_of_financial_residence_mandatory_in_spain_for_foreign_vendors.html

[Edited at 2016-08-08 15:31 GMT]


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Paulette Romero  Identity Verified
Colombia
Local time: 11:06
English to Spanish
+ ...
Agree with Katalin Aug 19, 2016

The form you need to submit is the W-9, Request for Taxpayer Identification Number and Certification.
https://www.irs.gov/pub/irs-pdf/fw9.pdf

A W-2 is what your employer gives. A W-9 form is a form you provide companies as a freelancer which has your name, address and SSN or EIN on it for tax purposes.


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Gabriella Vento  Identity Verified
United States
Local time: 09:06
Member (2015)
Hungarian to English
+ ...
TOPIC STARTER
W-9 it is (or should have been) Aug 19, 2016

Thank you Paulette, you are right, I meant the W-9.that is the form, we usually required to provide.
Unlike this company..

Paulette Romero wrote:

The form you need to submit is the W-9, Request for Taxpayer Identification Number and Certification.
https://www.irs.gov/pub/irs-pdf/fw9.pdf

A W-2 is what your employer gives. A W-9 form is a form you provide companies as a freelancer which has your name, address and SSN or EIN on it for tax purposes.




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Outsourcer requiring pricy IRS certificate, as condition of cooperation.

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