Xbox, Game and Steam Developers Who Are Not US Citizens ...

By Alex Oware on 06/24/2015 10:00 PM

If you are an independent game developer and a non-U.S (Non-Resident Alien) inventor,  then the task of processing your personal and tax information can be very challenging. Therefore, this blog post attempts to shed some light on the process, and ensure that payment made from the sales of your invention is hassle free.Independent game developers who are non-U.S. based creators, may be eligible for a reduction or exemption from U.S. income tax on their revenue, provided their country has a tax treaty with the U.S.If this is the case,  you may be able to take advantage, providing you have a relevant Individual Taxpayer Identification Number (ITIN) and submit a properly completed treaty claim on Form W-8BEN.Tax treaty information  appears to be  the most difficult and confusing part of the tax process for independent game developers who are not based in the U.S.:

  1. You must determine if your country has a tax treaty with the U.S., and
  2. You must decide if you would like to take advantage of the tax treaty
Determine if your country has a tax treaty with the U.S. If your country falls into a “tax treaty” zone. See this page Table 1, Column 12 – Copyright Royalties, Other, and Footnotes). If your country has a ( 0) in that field, it means your income will be subjected to 0% withholding. If you are above 0%, the US will unfortunately withhold at that rate.Decide if you would like to take advantage of the tax treaty If your country has a tax treaty with the U.S. then you may like to take advantage in order to claim a reduction in U.S. income tax. Therefore, you must apply for an ITIN and submit a properly completed Form W-7 to the IRS.Note: an ITIN is not strictly required to get paid, although without it you will be subject to an automatic 30% U.S. tax withholding, even if your country provides a lower rate of U.S. taxation.It is important to note that the process of applying for an ITIN alone can take weeks / months and it is easy for the ITIN application to be rejected by the IRS if Form W-7 is not completed in the right order.

***Disclaimer: I am a tax accountant and a CPA , but I am not your accountant or advocate (Unless you have signed up to my services). This communication is not intended as tax advice, and no tax accountant -client relationship results**