Congratulations to all winners of the Build Challenge! Like me, you must have received the KYC form to receive your prize. Lots of pretty standard questions in there, no big deal, until I hit the Tax Form part... As a French national residing in Japan, I frankly have no idea how to go about filling this W-8BEN form. I have to investigate the tax treaty between US and Japan but I have no idea what this prize is categorized as. The IRS instructions says the following income categories are subject to 30% unless there is a special case in the tax treaty: Interest (including certain original issue discount (OID)); Dividends; Rents; Royalties; Premiums; Annuities; Compensation for, or in expectation of, services performed; Substitute payments in a securities lending transaction; or Other fixed or determinable annual or periodical gains, profits, or income. Does anyone have more information about how to go around claiming this prize?

Note that I asked Stellar.org and they told me they are checking with their legal team what the reward should be categorized as. I will post here when I get their reply.

A W-8BEN is for you to claim that you're not liable for US taxes.

dzham At least that's usually the case for when you're contracting. I'm Swedish, tax resident (but not a tax-payer; no domestic income) in the Philippines, with a US LLC. FUN. I don't even want to think about this. This is isn't a prize, this is a liability.

dzham Yes, so I need to know if this should be considered a "compensation for services performed", like contracting, in which case it seems not to be subject to the 30% withholding under the US-Japan tax treaty for my case. Headache for sure...

I'm in a similar boat here. Belgian, living in the Netherlands, having won a price of magical Internet coins from a US non-profit. I share in the fear that this would become more of a liability than a price. Let's see if we can work out what to do together with the good peeps from Stellar.org.

Good thread, Reside in Australia right now, looking at tax treaty, can't classify prize for coding competition as any of categories in tax treaty, so should it go as "not expressly mentioned" ? Does that mean US should not withhold anything and I will just pay Australian income taxes? Such a pain in the ass

Well, it was not a required field like the other fields so I skipped it.

dupe That's certainly one way to go about it I suppose ?

[unknown] Well it only half registered there was anything to fill out for me at all there. I didn't have to fill it out last time and it wasn't a required field anyway so I figured it's something not relevant to me but maybe only for US citizens. I'd expect there to be some explanation if it really was required. But could be it's different this time and I made a mistake. I hope not because I'd have to pay more than 40% income tax on it.

dupe I believe that if you skip that form, they will by default withhold 30% for taxation in the US. Obviously, I'm not 100% sure about that, it would be great to get more info from StellarOrg on that. Edit: the instructions are pretty clear. Failure to provide a Form W-8BEN when requested may lead to withholding at the foreign-person withholding rate of 30% or the backup withholding rate under section 3406.

Tax form for Build Challenge prize

frejete

MisterTicot I filled only field 6 with my local tax number. I also filled fields 9 and 10 with the details of my country's tax treaty.

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