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Tax Withholding for VHX
VHX/Vimeo transactions are sourced in the United States and are therefore subject to U.S. tax laws and withholding requirements.
Therefore, VHX/Vimeo is required to collect tax forms or automatically withhold funds from all VOD sellers, regardless of their home country, in order to be legally compliant.
After January 1, 2017, any VHX/Vimeo VOD payments will be subject to 28% withholding of gross sales if you do not have an approved tax form on file. In these situations, the amount withheld will be immediately remitted to the U.S. Internal Revenue Service (IRS) and cannot be returned to the seller.
If you're a U.S. citizen or entity, we will not withhold any funds as long as you have successfully connected your U.S. bank account to receive payments.
For sellers from other countries, your withholding rate may be up to 30% of your net revenue. However, many countries have tax treaties with the United States that will reduce this rate to 0%. (Learn more about making a tax treaty claim.)
How your tax information is used: Vimeo/VHX uses Tipalti, a third party vendor to help gather and maintain your tax information. We may use the information supplied on your W-8 or VHX payout settings for end-of-year reporting purposes. For example, when it’s time to send 1042s to international creators, or 1099s to U.S. creators that meet the required thresholds, your information will be used to generate those forms.
How to Submit Tax Forms to VHX
It is crucial for all non-U.S. VHX/Vimeo sellers to submit their tax forms as soon as possible.
After January 1, 2017, any VHX/Vimeo payments will be subject to 28% withholding of gross sales if you do not have an approved tax form on file.
Read below to learn which form to submit, and how.
Instructions for U.S. sellers
U.S. residents and entities must connect their U.S. bank accounts in their VHX settings. The business information provided will serve as a W-9 form and you will not be subject to withholding once your setup is verified.
You can edit these details on your Billing Settings page.
Instructions for sellers from other countries
Residents of other countries must submit a U.S. W-8 tax form and will only be subject to withholding if it is legally required for your country.
Businesses and organizations:
- If you're selling on behalf of a business or organization, you can submit a W-8BEN-E on the bottom of your Billing Settings page on VHX.
- If you're an individual seller, you must first check this IRS page to see if your country has a tax treaty with the U.S.
- If your country is listed on the IRS page above, you will be not subject to any withholding from Vimeo if you submit a W-8BEN tax form with a valid tax treaty claim. Download the form and then submit a completed copy to email@example.com.
- If your country is not listed above, your net revenue will be subject to 30% withholding if you complete a valid W-8BEN form. You can submit all the necessary forms on the bottom of your Billing Settings page.
Making Tax Treaty Claims
VHX/Vimeo sellers from countries other than the United States may be subject to withholding based on U.S. tax laws.
Businesses generally will not be subject to withholding if we have a valid W-8-BEN-E form on file before a payment is processed.
Individuals may be subject to withholding up to 30% of net revenue unless your country has a tax treaty with the United States and you file a valid treaty claim.
Check this IRS list to see if your country has a tax treaty with the U.S. If so, you will need to download a W-8BEN form and then submit it, along with a valid tax treaty claim, to firstname.lastname@example.org.
You can find more information about current tax treaties (and their specific exemptions) in the IRS publication on U.S. Tax Treaties. We recommend taking the time to consult a tax professional so you can ensure that you make the proper treaty determinations and submit a valid treaty claim.
Please note: VHX/Vimeo has determined that VHX/Vimeo payments are services-related (not royalty-related) because VHX/Vimeo is providing you with software as a service (i.e, the VHX distribution platform). Therefore, you cannot make a royalty-based treaty claim.
Understanding the different tax forms
This article describes the different types of forms you may be asked to submit as a VHX/Vimeo seller.
VHX/Vimeo uses Tipalti, a third party vendor which helps us collect and review tax paperwork. If Tipalti is unable to process the form you submit, you’ll be notified via email and asked to provide the required information.
If we do not have proper forms on file for your account when a monthly payment is processed, your payments might either be paused or subject to withholding of 28% of your gross sales.
A W-9 form is the means by which U.S. taxpayers provide identifying information to services like VHX/Vimeo. A W-9 requires you to provide your name, address, and Taxpayer Identification Number (TIN) (more on this below). If you are a United States-based creator you may complete this info in your VHX payout setup in lieu of submitting a completed W-9 form before receiving payments from VHX/Vimeo.
A W-8 form identifies a person in a foreign country that received money from a U.S. entity.
All non-U.S. creators (except those with a U.S. TIN) must provide this form prior to receiving payments from VHX/Vimeo. The most common types of W-8 forms are form W-8BEN (for individuals) and form W-8BEN-E (for companies). Once you provide some preliminary information in your VHX billing settings, the appropriate type of W-8 form will appear automatically.
If you live in a country that has an income tax treaty with the U.S., you can make that treaty claim on your W-8 form. This may reduce the amounts that VHX/Vimeo may need to withhold. See the help article on withholding for more information.
If you are an international (non-U.S.) creator and you are unable to provide a W-8, or the form you submit is incomplete or contains errors, starting this year, we will need to pause your payments until you have submitted a completed W-8 form.
Some international sellers who begin filling out a W-8BEN form in their account settings may be asked to submit an 8233 form. At this time, there is no need to submit this form, and we are working to update our online tax form process to remove the 8233 form.
In the meantime, if you are prompted to submit an 8233 form, please do not submit any tax forms. Once we've made the necessary updates, you will be able to submit a completed W-8BEN form instead (with the option to make a tax treaty claim directly on that form, if necessary).
If you have questions about the timing of this update, please contact us.
If you are a U.S.-based creator, we will send you a 1099-K form if you meet both of the following requirements:
- You have earned more than $20,000 in gross revenue on VHX over the calendar year; and
- More than 200 transactions have occurred in relation to your VHX site(s)
Please note: If you sell multiple titles on VHX, we aggregate your revenue and transactions across all of your titles to determine if you meet these thresholds. If you receive a 1099-K, note that it will report the “gross revenue” from your sales, not the revenue that Vimeo actually paid out to you.
If you do not meet these thresholds, we won’t send you a 1099-K form, but your VHX earnings will remain subject to U.S. taxes. We advise contacting a tax professional to determine your tax responsibilities.
Finding your Taxpayer Identification Number (TIN)
Determining your Taxpayer Identification Number (TIN) depends on where you are located as an individual or entity.
- For U.S.-based individuals: Your TIN is the same as your social security number.
- For U.S.-based entities (corporations, partnerships, LLCs, etc.): In general, your TIN is usually the entity’s Federal Employer Identification Number (FEIN). In some cases (e.g., LLC, S-corp corporations, partnerships), however, the TIN may be that of the owner. Consult with a tax professional to determine what your TIN is.
- For creators based outside the U.S.: If you are a U.S. citizen living abroad, you must provide a TIN. If you are a non-U.S. citizen residing outside of the U.S., you may either provide a W-9 (if you have a TIN) or provide a W-8 (if you do not have a TIN).
Our team cannot provide legal or tax advice. However, we're happy to help you through the process of submitting the proper form. Contact us and we'll get back to you as soon as possible.