International Royalties Tax Reporting Guide

If you receive International royalties, ASCAP provides you with information that should reduce your taxes. Specifically, the royalties reported on your Form 1099, Statement of Miscellaneous Income, have been "grossed up" to include taxes withheld by foreign affiliated societies, so you can claim them as a foreign tax credit or deduction.

Members earning royalties in any of the foreign societies that withheld taxes and paid them directly to the local foreign government have the option to claim these taxes as a foreign tax credit deduction, thereby reducing their U.S. tax liability.

Of course, each individual's financial circumstances are unique. Consequently, you should consult your tax advisor to determine the best method of reporting.

The popularity of American music abroad is enormous and our members should receive the highest possible earnings from international performances. Taking a foreign tax credit will make a real difference for many of you and we are pleased that ASCAP is able to provide this savings opportunity to our writer and publisher members.





SAMPLE SUMMARY

ASCAP

American Society of Composers, Authors and Publishers
250 West 57th Street
New York, NY 10107

International Distribution Summary

Member Name: Jane Smith
Member ID: 0000000

December 31, YYYY

Jane Smith
100 Main Street
Everytown, USA


1

2

3

4

5

6

 

COUNTRY

IRS COUNTRY CODE

FOREIGN EARNINGS
(LOCAL CURRENCY)

FOREIGN TAXES WITHHELD
(LOCAL CURRENCY)

FOREIGN EARNINGS
(U.S. $)

FOREIGN TAXES
WITHHELD (U.S. $)

 

Agentina
Australia
Brazil
Bulgaria
Chile

AR
AS
BR
BU
CI

27,834.46
30,526.51
33,348.22
4.32
1,314,593.88

(4,013.64)
(1,709.36)
(5,442.83)
(0.34)
(392,707.87)

$8,819.06
$28,043.41
$18,647.95
$2.79
$2,557.90

($1,271.68)
($1,570.32)
($3,043.57)
($0.22)
($764.12)
____________
TOTAL: ($6,649.91)



EXPLANATION OF COLUMNS 1-6

1.

Country is the country from which ASCAP received payment.

2.

IRS Country Code is the two-letter IRS code required to complete IRS Foreign Tax Credit forms 1116 and 1118 to claim a foreign tax credit.

3.

Local Currency Earnings are the amount of local foreign earnings ASCAP received for the member from the affiliated foreign society in that country's local currency, plus the taxes which the foreign society withheld. This background information is provided for reconciliation, IRS audit purposes and conversion rates.

4.

Local Currency Taxes are the taxes withheld by the affiliated foreign society for payment to its local tax authority. This information is required to complete IRS Foreign Tax Credit forms 1116 and 1118 for a foreign tax credit.

5.

Foreign U.S. $ Earnings are the local currency amounts (column 3) plus the local currency foreign taxes withheld by the affiliated foreign societies (column 4) converted to U.S. dollars. These earnings are used only if you claim a foreign tax credit on IRS Foreign Tax Credit forms 1116 and 1118.

6.

Foreign Taxes U.S. $ are the foreign taxes withheld by the affiliated foreign societies in U.S. dollars. This amount is included in your earnings on Form 1099, Statement of Miscellaneous Income, reported to the IRS. This amount will be used as your foriegn tax credit or as a deduction, depending on the option you choose.