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Medhunter avatar image
Medhunter asked

Form 1042-S , TAX for no-US sellers .any advice please?

I received an email from amazon about Form 1042-S (IMPORTANT: 1042-S Tax Forms Now Available for Download) and they Say ( Please consult a tax advisor or www.irs.gov if you have questions about how to use this information, including whether you can apply with the IRS for a refund, or whether your domestic taxing authority might provide a deduction or credit for withholding taxes. )

I live in morocco and I already talked with a tax Advisor and he doesn t have knowledge about this, anyone can tell me what I have to do please, and i m afraid that if I don't do something about that I will lose my merch account ..

I will really appreciate your help !

Regards

merch by amazonhelphow-topaymentspayment taxes reporting
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2 Answers

Pratik avatar image
Pratik answered

No you won't lose your Merch account. It's just for your information. Depending on your country, you may or may not be able to get the amount (%) they withheld during given year exempted from your income tax filing in your local country. I'd advise to find a better tax consultant who has some idea about international taxation. If nothing works out, you don't need to worry or do anything but just pay your regular income taxes in your country based on the income you earned.

Caveat - I am not a tax lawyer or consultant. This is not a professional tax advice and neither should be taken as that. Consult an appropriate CPA in your area.

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Medhunter avatar image Medhunter commented ·

Thanks for your response I really appreciate it. For now merch by amazon withhold %10 of my royalties. and if I want to pay local tax in my country I have to pay with the %10 , but it's withholded , so how can I do that , am I missing something?

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Pratik avatar image Pratik Medhunter commented ·

See my below reply to a person's comment. You don't pay income taxe on that 10% withheld but the actual amount you received in your bank account. Depending on your country's tax laws, you may or may not be able to get those lost 10% which were withheld exempted from your income tax filing/return.

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newuser-89540c29-ee8c-4326-9091-1c1bdb1bf29b avatar image newuser-89540c29-ee8c-4326-9091-1c1bdb1bf29b commented ·

I have the same problem. But in my case, Amazon did not withhold any taxes because I was able to provide US EIN tax number as a foreigner. So I got full payments from amazon with 0% withholding tax rate. I'm not sure what to do with the 1042S form. Am I suppose to pay anything to US IRS or just liable to pay local tax?

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newuser-602da94f-ae59-4516-a749-dfb90d4d7ba4 avatar image
newuser-602da94f-ae59-4516-a749-dfb90d4d7ba4 answered

Up ! I need help, for now merch by amazon withhold 10% of my royalty i live in morocco and If i want to pay local tax in my country i have to pay with the 10% but it s withholded by mba , so how can I do that , if I do nothing about submitting the form to IRS, will they ask for tax payment in my country using my tax Code id i provided to merch?

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Pratik avatar image Pratik commented ·

IRS won't ask you anything. They withheld 10% from you and they are done. Now it's up to you whether you want to take a refund for that 10% from your country in your income tax filing or not.

And no, you don't pay income tax on the gross income (i.e. subtract that 10% as they never reached to your bank account). You pay income taxes on the NET income (the actual amount you received in your bank during the given financial year). Those 10% that were withheld are not to be counted, at least in my country (India) that's how it is since I never saw that money. I take exemption for that withheld amount in my income tax filing.

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Medhunter avatar image Medhunter Pratik commented ·

thank you so much for your response, so here is the thing , amazon paid me for only 3months now, ( I started 3 months ago) , so they withhold 30% first month , and then I added the Tax Number using Account merch to update my tax info, then they reduce it to 10% .

now if I understand , all these 10% per month that merch by amazon withhold, will be sent automatically to the IRS ? " by the way I don't want to receive it " , I m just asking if I don't do nothing in my way ( I don't know what to send to the IRS , or how to complete any form .. this is where I m confusing ) and in my country , they don't have knowledge about english tax ..

so I hope you mean that I'll not have any issue if I don't send the form to the IRS?

I look forward to your response, please let me know if something is wrong .

thank you

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Pratik avatar image Pratik Medhunter commented ·

Hey there,

As you are living outside of USA, you do NOT need to do anything or send anything to IRS. Amazon already sent this info of the amount they withheld from you to IRS. As a non-USA citizen, you do NOT need to send anything to IRS. The form 1042-S is merely for your information and record and also if you want to get that amount exempted from your country's income tax.

So yep, there's no need for you to send any forms to IRS or anything. :-)

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