JPF Home Page Forums General Messages General Message Forum Now the U.K is doing it to me

I just received my year end statement from CCLI, which has about tripled my last statement, and of course the US took 30% withholding tax as usual, but now the U.K. is taking 20% withholding tax from my earnings in Britain and Europe, plus I have to show my earnings on my Canadian tax return, so there is little left for me. Taxed higher that millionaires, yet I am a poor man. Oh the joys of being a songwriter. LOL

The Tax Man Cometh... (I think that's from Shakespeare... but wouldn't wager on it.)

It is a shame, Everett... the Songwriter has the worst odds of success... and little reward for all that effort. It's a dog-gone shame!

Bummer Everett! I reckon the powers-to-be think we should just be happy they let us compose.

John

Well,
I dunno. Maybe it's to pay for all that "Free" Health Care you get?

Well Ray I don't mind paying taxes to my government because governments need money to provide health care and many other things, what irks me is paying tax to other governments that give me no service. And I have no way of claiming it back. But I am happy to know that at least my songs are being heard and used. Money is nice to have but its importance is far too overblown. I have enough to keep me in the little time I have left, why accumulate more for someone else to spend.

Other countries tax me as well Everett. I didn’t see any Canadian taxes on my earnings though. The highest one last year was Brazil. I'm going to check with my accountant this year, and see if I can deduct these taxes off mine.

John

Um, Yes, Taxes!
It has been reported that California is so broke they are compulating taxing Texting.. Yes! You heard it correctly. And if they can get away with it, they will do it! No wonder people cheat on their Taxes.

People cheat on their taxes Ray? That's hard to believe.

John

Um, Well,
A few years we went up to Nashville. We stayed in a Motel maybe a couple of nights. When we got the Bill there were enough Nickle Dime Local Taxes added to strangle an Elephant. It is done everywhere. They call it use Taxes. Some Call it Graft. Heck no, nobody cheats on his taxes, Eh? Kinda reminds you of some of those Small Town Traffic cops. And It still happens.

California is running a surplus. They ain't broke.

Everett, I don't know how much money is at stake here to justify the effort, but you might be able to get some or all of this money back. Is it VAT (Value Added Tax)?

No, it is just plain old withholding tax for earning, or in this case, royalties received in that particular country. At first it was only a few dollars but as my royalties went up, so did the tax total, which now is in the hundreds of dollars. If it was a low tax of 5%, I'd consider it reasonable as a cost of doing business, but 30% seems excessive, large companies don't get hit that hard.

The 20% in the UK is reasonable, so long as you are not being double taxed by also being taxed on the same income in Canada. I know that in the US, you can deduct foreign taxes paid from your US tax. It is common in the UK for taxes to be deducted at source. In general, it is a good thing as it makes filing your tax return much simpler.
Are you sure it's not VAT? I did a very, very superficial google search that suggests that royalties are indeed subject to VAT (like your GST).

CCLI said it is a withholding tax. I'm a bit familiar with GST with each level claiming back the tax except the final user. I think each country has some agreement with each other where the tax is reduced to a nominal sum, but I don't know how to apply for it. Seems local accountants don't come in contact with that requirement often, so they are no help to me. I may have to go to a tax lawyer, but I don't know if there is such a person in my neck of the woods. I may have to get in touch with the income tax department to see if they can help me.

I guess "withholding tax" doesn't tell you much without the reason that it is being withheld. I don't think I've heard the phrase used in connection with UK tax before.

It's a tax on earning or profit of a person or company that is not a citizen of the country where this income originates from. Still that earning are taxable in the country where the person or company resides. Double taxation.

Aren't there attorneys that specialize on royalties with foreign countries? On an unrelated city tax issue, I was being taxed from the county/city of the closest branch office to my home which had significant higher city tax and was approximately 100 miles from my home residence and not my customary sales territory--I just had to prove that I wasn't conducting sales or business in that city/county which was an easy task--my city tax base was adjusted. But with the nature music royalties, no doubt tracking business is more complicated. I'm with you about understanding why we have taxes support reasonable and justifiable taxation--but there should be away to be granted relief from "double taxation" or international laws that prevent this--this sounds more like a tarriff disguised as a standard tax. If an attorney can't help you, then perhaps write to the foreign country's representative along with our IRS to seek help--good luck however on that "red tape."

Have you threatened having another "tea party?"

steady-eddie

Everett, perhaps someone at your PRO can help you.

Donna

I can't speak for Canada, but I have experience wrestling with US taxation and a little experience with UK tax. I say "a little experience" because, although I come from the UK, most folks there don't even have to fill out a return, and when they do, it is a breeze compared to the ridiculous US system. I do know that, at least in the case of the UK and US, double taxation is easily remedied. A quick Google search for tax treaties between the UK and Canada should provide the information about where the income should be taxed. Going back to the case of the UK and the US for instance, most income that a US resident derives from the UK is taxed in the US, but some is not, such as rental income from UK property. The tax paid in the UK is deducted on the US return. There is a line for it right there on the 1040 form I believe. Maybe there is a similar possibility on a Canadian tax return.

If it's VAT rather than income tax, then things will probably be different.

I thank you both for your advice, I think I will get in touch with the tax department of the Federal government in the new year to see if they can help me.

Gavin and Eddie:

I thank you both for your advice, I think I will get in touch with the tax department of the Federal government in the new year to see if they can help me.

Thanks Donna, might be worth a try.

Hey Everett,

I'm no lawyer, but the "Five Eyes" countries ( US/UK/Canada/Aus/NZ ) have mutual tax agreements between them. You can't be taxed in all of them, only in your "home" country, and any with holding tax from one of those nations "should" be credited against your local country of origin tax.

I don't earn enough royalties to be bothered, but I'm pretty sure you can apply to said government for a direct refund, from those countries where you are not a permanent resident. i.e. "foreign investor"

Donna makes a good suggestion in that your PRO should know the logistics.

cheers, niteshift

PS - "Five Eyes" refers to the major English speaking countries of the world who not only share your tax information but the creepy spying stuff as well.

You're correct Nite, except for Australia. Taxes for Australia showed up on my ASCAP Distribution tax summary.

John

Most developed countries have tax treaties with the US, Five Eyes or not. One of the principal reasons is to avoid double taxation. I don’t know about Canada, but I assume it does do.

I've had investment earnings through mutual funds where I've had withholding taxes taken out for earnings in foreign countries, but it has only been about five percent or less. When you get into 20 and 30 % it really starts to hurt. I plan on calling our Federal income tax department in the new year to see what I can do about it. It don't make sense to be taxed at a rate of a millionaire in a foreign country where I get no benefits and no vote.