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Old 30.11.2011, 17:24
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ITIN application form question

Hi All

I'm applying for a US tax identification number (ITIN) with a form called a W7. Can anybody clarify which option I should tick at the beginning of the form?

My position is that I have a British passport, I live in Zurich and have a contract with a US company. In the first section there are two boxes that could potentially apply to me:e

a) Nonresident alien required to get ITIN to claim tax treaty benefit
b) Nonresident alien filing a U.S tax return

I suspect that option b) applies to me because I'm not a student, professor or researcher. However if I tick this box I must submit a tax return form.

If option b) does indeed apply to me, does anybody know which tax return form I should fill out?

Many thanks in advance
Chris
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Old 30.11.2011, 18:13
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Re: ITIN application form question

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Hi All

I'm applying for a US tax identification number (ITIN) with a form called a W7. Can anybody clarify which option I should tick at the beginning of the form?

My position is that I have a British passport, I live in Zurich and have a contract with a US company. In the first section there are two boxes that could potentially apply to me:e

a) Nonresident alien required to get ITIN to claim tax treaty benefit
b) Nonresident alien filing a U.S tax return

I suspect that option b) applies to me because I'm not a student, professor or researcher. However if I tick this box I must submit a tax return form.

If option b) does indeed apply to me, does anybody know which tax return form I should fill out?

Many thanks in advance
Chris
Why are you getting an ITIN?
As a Non-Resident Alien, you are only taxed on US sourced income. You sound like you will not be performing any services in the US.

Or are you a partner in a partnership engaged in US trade or business?
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Old 30.11.2011, 18:48
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Re: ITIN application form question

I am bit confused and would need more information.

Was you instructed to apply for an ITIN by your company? Why are you on a US contract? Are you on the US payroll? Are they withholding taxes in the US?
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Old 01.12.2011, 09:10
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Re: ITIN application form question

Thanks for taking a look at this Jordan

In answer to your questions. I have a writing contract with a US-based publisher. Although I've been writing in Switzerland, my work is technically based in the US. I was asked to fill out a
W-8BEN that needs an ITIN.

Do you know which tax form I should complete, with regard to the ITIN? Or is it even necessary?

Thanks in advance
Chris




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Old 01.12.2011, 14:24
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Re: ITIN application form question

treaty benefit. as nonresident receiving income from US source, you will need to file W8ben to tell the payor that you qualify for no tax withholding based on treaty US/Swiss.
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Old 01.12.2011, 14:38
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Re: ITIN application form question

Thanks tapazoh!

So I'll tick option a) Nonresident alien required to get ITIN to claim tax treaty benefit.

Do you also know what information I need to enter under the corresponding field h)?:

Other: ?
Enter treaty country: Switzerland
Treaty article number: ?


Do you know the treaty article number for Switzerland?

The 'Other' field asks that I give a detailed reason why I'm applying for an ITIN. I expect the reason I explained in an earlier post will suffice if I add additional information regarding the situation with my employer.

Thanks in advance
Chris
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Old 01.12.2011, 14:51
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Re: ITIN application form question

I think you want Article 23, paragraph 3 " relief from double taxation"
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Old 01.12.2011, 15:00
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Re: ITIN application form question

Many thanks for your help Jordan and tapazoh!

Much appreciated.

Chris
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Old 01.12.2011, 15:03
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Re: ITIN application form question

ARTICLE 23
Relief from Double Taxation
1. In the case of Switzerland, double taxation shall be avoided as follows:
a) Where a resident of Switzerland derives income which, in accordance with the
provisions of this Convention, may be taxed in the United States, Switzerland shall;
subject to the provisions of subparagraphs b), c) and d) and paragraph 3, exempt such
income from tax; provided, however, that such exemption shall apply to gains referred to
in paragraph 1 of Article 13 (Gains) only if actual taxation of such gains in the United
States is demonstrated. Switzerland may, in calculating tax on the remaining income of
that resident, apply the rate of tax which would have been applicable if the exempted
income had not been so exempted.
b) Where a resident of Switzerland derives dividends which, in accordance with
the provisions of Article 10 (Dividends), may be taxed in the United States, Switzerland
shall allow, upon request, and subject to the provisions of subparagraph c), a relief to
such resident. The relief may consist of
i) a deduction from the Swiss tax on the income of that resident of an
amount equal to the tax levied in the United States in accordance with the
provisions of Article 10 (Dividends); such deduction shall not, however, exceed
that part of the Swiss tax, as computed before the deduction is given, which is
appropriate to the income which may be taxed in the United States; or
ii) a lump sum reduction of the Swiss tax; or
iii) a partial exemption of such dividends from Swiss tax, in any case
consisting at least of the deduction of the tax levied in the United States from the
gross amount of the dividends.
Switzerland shall determine the applicable relief and regulate the procedure in accordance with
the Swiss provisions relating to the carrying out of international conventions of the Swiss
Confederation for the avoidance of double taxation.
c) Where a resident of Switzerland derives income
i) described in paragraph 2 of Article 10 (Dividends) or paragraph 6 of
Article 11 (Interest) which is not entitled to any reduction in U.S. withholding tax
pursuant to those provisions; or
ii) which may be taxed in the United States in accordance with the
provisions of Article 22 (Limitation on Benefits)
Switzerland shall allow the deduction of the tax levied in the United States from the gross
amount of such income.
d) Where a resident of Switzerland derives payments that may be taxed by the
United States pursuant to paragraph 4 of Article 19 (Government Service and Social
Security), Switzerland shall provide a relief to such resident consisting of a deduction
equal to the tax levied in the United States, plus an exemption equal to one-third (1/3) of
the net amount of such payment from Swiss tax.
2. In the case of the United States, double taxation shall be avoided as follows: In accordance
with the provisions and subject to the limitations of the law of the United States (as it may be
amended from time to time without changing the general principle hereof), the United States
shall allow to a resident or citizen of the United States as a credit against the United States tax on
income the appropriate amount of tax paid to Switzerland; and, in the case of a United States
company owning at least 10 percent of the voting stock of a company which is a resident of
Switzerland from which it receives dividends in any taxable year, the United States shall allow as
a credit against the United States tax on income the appropriate amount of tax paid to
Switzerland by that company with respect to the profits out of which such dividends are paid.
Such appropriate amount shall be based upon the amount of tax paid to Switzerland. For
purposes of applying the United States credit in relation to tax paid to Switzerland the taxes
referred to in subparagraph 2 a) and paragraph 3 of Article 2 (Taxes Covered) shall be considered
to be income taxes.
3. Where a resident of Switzerland is also a citizen of the United States and is subject to
United States income tax in respect of profits, income or gains which arise in the United States,
the following rules apply:
a) Switzerland will apply paragraph 1 as if the amount of tax paid to the United
States in respect of such profits, income or gains were the amount that would have been
paid if the resident were not a citizen of the United States; and
b) for the purpose of computing the United States tax on such profits, income or
gains, the United States shall allow as a credit against United States tax the income tax
paid or accrued to Switzerland after the application of subparagraph a), provided that the
credit so allowed shall not reduce the amount of the United States tax below the amount
that is taken into account in applying subparagraph a); and
c) for the purpose of subparagraph b), profits, income or gains described in this
paragraph shall be deemed to arise in Switzerland to the extent necessary to avoid double
taxation of such income; however, the rules of this subparagraph shall not apply in
determining credits against United States tax for foreign taxes other than the taxes
referred to in subparagraph 2 a) and paragraph 3 of Article 2 (Taxes Covered).
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Old 01.12.2011, 15:10
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Re: ITIN application form question

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Many thanks for your help Jordan and tapazoh!

Much appreciated.

Chris
I posted the atricle from the treaty, I didnt mean to bold font paragraph 1 of the treaty, so dont get confused by that.

It seems paragraph 3, c, is what applies to you.

It still seems bizarre to me, I mean, you are performing your work duties in Switzerland, so its not arising in the US, so I dont see why you are having to go through this. But is probably something at the corp level of the publisher whereby they take a deduction for you, as an employee.
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Old 01.12.2011, 15:21
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Re: ITIN application form question

Many thanks your help Jordan. I wouldn't know where to begin looking up information like this.

I'm not sure paragraph 3 applies to me because I have a British passport and I live in Switzerland.

I think paragraph 1 is more applicable to me, although I can't make sense of the sub-paragraphs.
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