DACS questions for Canadians

[John Mitchell]

I just received my latest DACS statement in the mail, and I notice that DACS has deducted British income tax. This has never happened before.

 

Have any other Canadian contributors encountered this?

[Jill Morgan]

Alamy does mine, so I receive simply what they put in the dashboard.  There is probably some form now you have to fill out.  I know if you list with one of the micro sites, you have to fill in a form if you are outside the US so they don't give money to the IRS.

 

Jill

[John Mitchell]

43 minutes ago, Jill Morgan said:

Alamy does mine, so I receive simply what they put in the dashboard.  There is probably some form now you have to fill out.  I know if you list with one of the micro sites, you have to fill in a form if you are outside the US so they don't give money to the IRS.

 

Jill

 

I file my own DACS claim and have always received the full amount. Canada and Britain have a tax treaty that prevents double taxation -- i.e. we have to pay tax to the Canadian government only. I've e-mailed DACS about this.

 

Has anyone who files their own DACS claim had the same problem this year?

 

P.S. The IRS form that you have to fill out in order to avoid double taxation is a W-8BEN. Have never had to complete a similar form for DACS. Just confirming that I reside in Canada has been sufficient.

[Reimar]

I have had trouble with DACS on withholding tax in years past, starting in 2015.  I used to get a certificate every year from CRA to declare I am a Canadian citizen (entitled to UK tax relief). Then one year DACS wanted a certificate for the current year (which wasn't over yet).  Of course no government would confirm I was a Canadian citizen for the full year before the year was out!  The solution was to go the HMRC website and fill out the forms.  You can get reimbursed from them although it will take some time.  For me, DACS admitted their mistake and paid me directly.  I think the HMRC registration is good for about 5 years.  Every year I wait for the trouble to start all over again.  Good luck John.

[John Mitchell]

2 minutes ago, Reimar said:

I have had trouble with DACS on withholding tax in years past, starting in 2015.  I used to get a certificate every year from CRA to declare I am a Canadian citizen (entitled to UK tax relief). Then one year DACS wanted a certificate for the current year (which wasn't over yet).  Of course no government would confirm I was Canadian citizen for the full year before the year was out!  The solution was to go the HMRC website and fill out the forms.  You can get reimbursed from them although it will take some time.  For me, DACS admitted their mistake and paid me directly.  I think the HMRC registrations is good for about 5 years.  Every year I wait for the trouble to start all over again.  Good luck John.

 

Thanks, Reimar. I seem to remember your mentioning this difficulty before. I've e-mailed the friendly folks at DACS to plead my case. Shall keep you posted.

 

If that doesn't work, guess I'll have to go directly to Buckingham Palace.

 

 

[John Mitchell]

20 hours ago, Reimar said:

I have had trouble with DACS on withholding tax in years past, starting in 2015.  I used to get a certificate every year from CRA to declare I am a Canadian citizen (entitled to UK tax relief). Then one year DACS wanted a certificate for the current year (which wasn't over yet).  Of course no government would confirm I was a Canadian citizen for the full year before the year was out!  The solution was to go the HMRC website and fill out the forms.  You can get reimbursed from them although it will take some time.  For me, DACS admitted their mistake and paid me directly.  I think the HMRC registration is good for about 5 years.  Every year I wait for the trouble to start all over again.  Good luck John.

 

 Here is the answer that I got back from DACS. It seems that things changed in 2016.

 

"I can confirm that the Canadian rate has been applied to your Payback royalties. This currently stands at 10%, as dictated by the taxation agreements in place between the UK and Canada. (The default UK rate of tax stands as 20%. The Canadian rate was previously 0%, but changed to the current 10% level in 2016."

 

They also sent me this link (see pg.11 of the document for details about withholding rates).

 

Strangely enough, no UK tax was withheld from my 2016 and 2017 DACS payments  as far I can see. I wonder if it's still possibly to get the UK tax back? I went through a similar rigramole with Germany a couple of years ago and gave up trying to get withheld taxes back. The red tape was unbelievable.

 

 

[John Mitchell]

21 hours ago, Reimar said:

I have had trouble with DACS on withholding tax in years past, starting in 2015.  I used to get a certificate every year from CRA to declare I am a Canadian citizen (entitled to UK tax relief). Then one year DACS wanted a certificate for the current year (which wasn't over yet).  Of course no government would confirm I was a Canadian citizen for the full year before the year was out!  The solution was to go the HMRC website and fill out the forms.  You can get reimbursed from them although it will take some time.  For me, DACS admitted their mistake and paid me directly.  I think the HMRC registration is good for about 5 years.  Every year I wait for the trouble to start all over again.  Good luck John.

 

Reimar, hate to be a pest, but are the forms you mentioned to be found somewhere on this page?

 

God I hate this kind of stuff.

[Reimar]

The Form I used was like this one:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/452984/canada-individual.pdf

It requires a sign-off by our own CRA.  Takes some time. 

That stuff about 10% being withheld doesn't seem right.  As I said, I started this stuff in 2015, and eventually got it down to 0%, and it's been there for three years now.

It's this kind of bother that makes one think of letting Alamy do it.

[Sally]

On 01/11/2018 at 19:39, John Mitchell said:

 

Thanks, Reimar. I seem to remember your mentioning this difficulty before. I've e-mailed the friendly folks at DACS to plead my case. Shall keep you posted.

 

If that doesn't work, guess I'll have to go directly to Buckingham Palace.

 

 

Sorry, I don’t think that approach will help a lot ☺️

[John Mitchell]

1 hour ago, Reimar said:

The Form I used was like this one:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/452984/canada-individual.pdf

It requires a sign-off by our own CRA.  Takes some time. 

That stuff about 10% being withheld doesn't seem right.  As I said, I started this stuff in 2015, and eventually got it down to 0%, and it's been there for three years now.

It's this kind of bother that makes one think of letting Alamy do it.

 

Much appreciated. Perhaps others who let Alamy do the DACS work are having 10% withheld as well. Who knows.

 

As mentioned, Germany does the same thing -- i.e. withholds 10%. Getting it back requires a very heavy dose of Teutonic resolve, which I seem to lack. Also, the necessary forms are all in German with no English translations available.

 

I had to do the CRA signoff thing a number of years ago over an image that I sold independently to a book publisher in Italy. It wasn't for tax purposes, though. Without completing the red tape, I wouldn't have gotten paid at all. Let's make life as difficult as possible, why don't we...

[John Mitchell]

12 minutes ago, Sally said:

Sorry, I don’t think that approach will help a lot ☺️

 

Yes, they would probably just see me as a royal pain in the you-know-what.