100 Ways To Get Rejected: Petition For The Rectification Of The 1973 Romanian-US Tax Treaty
What's this 100 Ways To Get Rejected challenge about? Check this introductory post to find out.
I'm starting to get the hang of petitioning: I've petitioned yesterday the Ministry of Communications and Informational Society for the implementation of a national Public Transportation API and today I'm going to petition the government at http://gov.ro/en/contact (it was easy to find their email address for petitions) for the rectification of the old, 1973 tax treaty with America. My reason? I'm being charged a 30% Tax Withholding on the royalties resulting from the sale of my book, "A Story on the Camino"; Amazon is already taking another 30% for the Kindle version of my book and 40% for the paperback version so I'm left with next to nothing. This is why I'm petitioning for this seemingly disadvantageous tax treaty.
I need to know about what to write in my petition so I have to do some fact checking and have some data. Upon checking out the text of the treaty which can be found on the IRS website at https://www.irs.gov/pub/irs-trty/romania.pdf I found out that the Article 12 referring to royalties states that "Royalties derived by a resident of one of the Contracting States from sources within the other Contracting State shall not be taxed by the other Contracting State at a rate in excess of 10 percent of the gross amount of cultural royalties or at a rate in excess of 15 percent of the gross amount of industrial royalties" and cultural royalties are defined as "Cultural royalties are payments of any kind made as consideration for the use of, or the right to use, copyrights of literary, artistic, or scientific works, including copyrights of motion picture films or films or tapes used for radio or television broadcasting;" Hmm...so the tax for cultural royalties is 10% and not 30% as Amazon is charging me. What's going on? Is Amazon intentionally ignoring an international treaty? So I go back to Amazon and try to figure out what's going on.
On Amazon's website (https://kdp.amazon.com/en_US/help/topic/G201274690) it states that for Non-US publishers "Royalty payments for sales on the U.S. store are subject to 30% U.S. tax withholding" unless "their country of permanent residence has an income tax treaty with the United States". But this is not all, there is something more. "To qualify for reduced withholding, you must enter an income tax identification number (TIN) in the U.S. tax information interview. If you have a U.S. TIN, you must provide this number. If you do not have a U.S. TIN, you may enter the income tax identification number issued to you by the tax authority in your country of residence." So, basically, even if your country has or not a tax treaty with the US you will be subjected to a 30% TAX Withholding unless you have a US TIN or its equivalent in your country of residence.
I have to offer an additional explanation: I created my 100 Ways to Get Rejected List during a brainstorm and the most important rule in a brainstorm is to write down whatever idea crosses your mind, even if it's crazy, bizarre, impossible and so on. Well, when I thought to add this petition to the list I was thinking about this several months old problem with Amazon that had something to do with an old tax treaty; in other words, I only had a hazy idea but I put it down in writing nonetheless. Somehow, during the past several months, it seems that in my memory the problem had metamorphosed into something else, the issue is not with the tax treaty, it's actually with the tax identification number - a problem that I clearly haven't solved back then for some reason.
After a quick search (https://ec.europa.eu/taxation_customs/tin/pdf/en/TIN_-_country_sheet_RO_en.pdf) I find out that's actually quite easy to obtain your Romanian TIN, there are many ways in which you can do it, you can get it from your passport, from your identity card, your driving license, from the Certificate for Tax Information.
In the end, instead of petitioning the government for a new tax treaty with the US I take again the Amazon Tax Information Interview, add my Romanian TIN and hope for the best. I'm actually writing this post on the go, writing after doing each of the aforementioned steps so a few minutes after writing my last sentence I got my interview and my newly submitted information automatically approved and validated - I was expecting a lengthier process - and I got my Tax Withholding down to 10%.
[caption id="attachment_762" align="aligncenter" width="985"] 100 Ways To Get Rejected: Petition For The Rectification Of The 1973 Romanian-US Tax Treaty[/caption]
Well, this is the story of a rejection that fortunately never happened.