The money you earn through the sale of your designs or products is considered taxable income. You are liable to pay tax when we pay out the positive balance to your account. That's why it's important that you state your tax status in your account correctly. This is the only way we can pay you your balance and report it to the relevant tax authorities.
Who am I – and what does that have to do with my tax status?
Your personal information is very important to determine your tax status, as it determines your tax status. Your country of residence and the commercial use of your account are the deceive factors here. Please make sure that your address is always correct.
If you use your account commercially, please make sure that the Company (e.g. corporation, LLC, self-employed with EIN)“ checkbox is set.
Once your personal information is complete, we only need the correct tax number to report your income to the appropriate tax authorities.
- If you are a resident of the USA, we need your SSN (Social Security Number)
- If you use your account commercially as a company in the USA, we need your EIN (Employer Identification Number)
- If you reside outside the USA, we need the tax number of your home country
You can enter your corresponding tax number directly in your account.
Why is the tax status so important?
We are required to report your income to the appropriate tax authorities. Without a tax number, we are not allowed to pay out your credit. It is very important that you always keep a check on your personal and tax status information. This is especially true if your data changes, for example after you move.
How can I reduce the tax deduction on my income?
Depending on your individual tax situation, you have the option to reduce or completely avoid your tax deduction. The most important factor here is your place of residence.
Resident and taxable in the USA
If you are a resident of the USA or your company is registered in the USA, you can completely avoid a 24% tax deduction. The only thing you need to do is to fill in the W-9 tax form and send it to taxation@spreadshirt.com. Once your personal information has been filled in correctly, we will make a form available to be downloaded in your account. There we also show you how to fill it in correctly.
Please note: We manually check each form submitted to us. This process can take up to 3 months. Only when the check has been completed can we pay out your credit without tax deduction.
Resident and taxable outside the U.S.
If you are not subject to taxation in the USA, i.e. if your place of residence or company is outside the USA, your income is by default subject to a tax deduction of 30%. However, if your country of residence has a double taxation agreement (DTA) with the USA., you can reduce or completely avoid this deduction.
You can find out whether your country has concluded a DTA with the USA and to determine the amount of the tax rate. Please refer to this overview in column 12 ("Copyrights"). Enter the tax rate and the corresponding "Treaty Article Citation" in line 10/14c in the tax form (W-8BEN/W-8BEN-E), which we will make available for you to download directly in your account, as long as you provide your complete personal information. Please fill it out completely and send it to taxation@spreadshirt.com.
Please note: We manually check each form submitted to us. This process can take up to 3 months. Only when the check has been completed can we pay out your credit without tax deduction.