• Common Instructor Questions About The W-8BEN

    Introduction

    The W-8BEN is the most common form for non-U.S. instructors who are individuals. You should fill out the W-8BEN if you are “a foreign person” and the beneficial owner of “an amount subject to withholding” (such as Udemy earnings derived from U.S. students).

    Because we know many non-U.S. instructors will be filling out a W-8BEN and may not have encountered U.S. tax forms before, we’ve provided some general information about the tax form platform for the W-8BEN below. These instructions are adapted from the official IRS instructions for the W-8BEN, available in English on the IRS website. 

    For questions about your specific tax details, you’ll need to consult a tax advisor. Udemy is not legally permitted to advise you on how your specific circumstances should be represented on your tax forms.

    Table of Contents

    Basic details

    United States citizenship status

    Taxpayer Identification Number

    Treaty claim

    Special rates & conditions

    Basic details

    Summary: On this page, you’ll be asked for some basic information about yourself, such as your name, residential address, and taxpayer identification number. This page is the same for all tax forms, but the information you enter may determine what questions you’re prompted to answer later in the process.

    Common instructor questions: 

    1. I am a citizen of one country, but a resident of another. What am I supposed to enter under “country of citizenship”?

    The IRS writes that if you are “not a resident in any country in which you have citizenship”, you should enter “the country where you were most recently a resident.” 

    For example, if you’re a citizen of Atlantis but currently living in Malaysia, and you’re not a resident of Atlantis anymore, you would enter Malaysia as your “country of citizenship” on line 2.

    1. To my knowledge, I don’t have a taxpayer identification number in my country. What should I enter?

    For non-U.S. instructors, your TIN will be the taxpayer identification number issued by your local government. The Organization for Economic Cooperation and Development (OECD) provides a helpful page in English here that details the names and formats that various countries use as TINs.

    1. I’m having trouble entering my Taxpayer Identification Number. What’s going on?

    The Udemy tax form platform uses the country you enter to pre-format your TIN. However, it’s possible that your TIN format may not perfectly match your country’s standard TIN format. If that’s the case, simply check the box for “TIN format non-standard” and enter your TIN. 

    United States citizenship status

    Summary text: On this page, you’ll provide additional details about your relationship with the United States. This will help us determine if you should actually be considered a U.S. person for tax purposes, even though you live outside the U.S. 

    Common instructor questions:

    1. Why can’t I edit my country of citizenship?

    The country of citizenship shown on this page pre-populates based on your selection from the “Basic details” page. If you want to edit your country of citizenship, you’ll need to use the “Back” button to return to the previous page.

    As with the “country of citizenship” question on the “Basic details” page, your “country of citizenship” is your most recent residential country (your “tax citizenship”).

    Taxpayer Identification Number

    Summary: On this page, you’ll confirm that your taxpayer identity information is correct.

    Common instructor questions:

    1. Why am I being asked to provide my TIN again?

    Your TIN is crucial to confirming your taxpayer identity and correctly calculating any applicable withholding. If you do not enter a valid TIN, Udemy will need to withhold at the maximum rate regardless of any other information you provide. This page is here so you can confirm that you’ve correctly entered your TIN.

    Treaty claim

    Summary: On this page, you may claim the benefits of any tax treaty between your country and the United States and reduce your rate of withholding. 

    Common instructor questions:

    1. Do I have to make a treaty claim to receive a reduced rate of withholding?

    Yes. If you live in a country with a tax treaty that would reduce your rate of withholding, you must claim the benefits of the treaty on this page for the reduction to apply.

    If you’re unfamiliar with IRS withholding, here’s a little more detail: 

    By default, Udemy must withhold 30% of income from U.S. student sales when paying out non-U.S. instructors. If you make a valid tax form submission without a treaty claim, you’ll see that 30% rate applied to the portion of your income derived from your U.S. students. (No IRS withholding will apply for income from non-U.S. students.)

    However, many countries have treaties with the United States that reduce this rate, sometimes even to 0%. The IRS provides an English list of these treaties here. Your Udemy earnings are considered “copyright royalties,” so please refer to that section of the PDF to see if your country has an applicable treaty. 

    1. I’d like to make a treaty claim, but my country isn’t listed. Why? 

    Our tax platform will only let you select countries with applicable tax treaties. If you’ve indicated you’d like to make a treaty claim, but your country isn’t listed on the dropdown menu, your country does not have an applicable tax treaty, and you will need to decline to make a treaty claim. 

    Special rates & conditions

    Summary: On this page, you can let us know if you have any less common circumstances that require you to give additional details about your tax treaty claim.

    Common instructor questions:

    1. How is this different from the regular treaty claim?

    For this section, you should only select "Yes" and proceed through the flow if you are claiming specific treaty benefits that require you to meet conditions you haven't already declared in your submission. For example, for copyright royalty income, you must complete this line if your country's treaty specifies different withholding rates for different kinds of royalties. 

    See the IRS's Tax Treaty Table (February 2019 version available in English here) for more about the treaty rates that different countries have negotiated with the U.S.

    Legal certification

    Summary: On this page, you’ll confirm that the information you’ve provided is complete and accurate, in preparation for your electronic signature in the final step of the process.

    Common instructor questions:

    1. Some of the legal certifications aren’t relevant to me, but I can’t proceed without checking the boxes. What should I do?

    Our platform treats each certification from Part III of the W-8BEN as an individual checkbox. On the original W-8BEN form, these are simply bullet points before the final signature, so they cover all possible scenarios in which an individual might be submitting the form. Checking the box confirms that you have reviewed the statement, and that if it applies to you, it’s correct. 

    For example, one of the certifications reads: “The person named on line 1 of this form is a resident of the treaty country listed on line 9 of the form (if any).” If you did not make a treaty claim, then the phrase “if any” indicates that this statement doesn’t apply to you.

    As an additional example, another of the certifications reads: “For broker transactions or barter exchanges, the beneficial owner is an exempt foreign person as defined in the instructions.” Since you aren’t submitting this form to cover income from broker transactions or barter exchanges (your Udemy income is considered copyright royalties), this statement doesn’t apply to you.

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  • Taxes: What do Instructors Need to Submit to Udemy?

    Submitting tax forms to Udemy

    Udemy is based in the United States, which means Udemy instructors have certain tax obligations to the U.S. government. We know it can be confusing to know what tax forms you need to submit as a Udemy instructor, so we’ve partnered with Comply Exchange to make it easier for you to complete the required forms via a secure platform (taxforms.udemy.com).

    All instructors must submit their tax forms, regardless of their country of citizenship. Once you begin the submission flow you will see the option to choose whether you are a U.S. or non-U.S. instructor as one of the first selections you make. Depending on what you choose, the platform will guide you through options that are unique to the selection you made as a U.S. or non-U.S. citizen.

    Submitting your form is important because it ensures that Udemy will withhold the correct amount for IRS withholding (more info at this link).

    Note: Udemy is not able to provide tax help or give any advice about what to include in your tax form submission. This guide is intended to help answer common questions that Udemy instructors might have about their obligation to submit tax documentation. 

    What do I need to do?

    Udemy has begun to proactively email published instructors to submit their tax forms via our secure form submission site (taxforms.udemy.com). If you haven’t yet received the link to submit your tax forms, you can expect this in the coming weeks. 

    If you’re a new instructor who hasn’t yet published a course, no action is currently required, but you may be contacted to submit your tax documentation in the coming weeks.

    How do I know which form to submit?

    If you’re not sure which form to submit or how to answer a question about your tax status, we recommend that you consult with a tax advisor to ensure you’re using the right form and entering information correctly.

    We can offer some basic information about the types of forms you can fill out via our tax platform:

    • W-9: used by U.S. individuals and entities to certify their Tax ID number
    • W-8BEN: used by non-U.S. individuals to certify that they are a beneficial owner or a financial account-holder, and claim treaty benefits
    • W-8BEN-E: used by non-U.S. entities to certify they’re a beneficial owner or a financial account-holder, and claim treaty benefits

    We also support the ability to submit certain less-common types of forms manually by contacting our Support team directly:

    • W-8ECI: used by non-U.S. individuals or entities to certify they’re a beneficial owner receiving U.S.-sourced income that is effectively connected with U.S. trade or business
    • W-8EXP: used by non-U.S. governments or other tax-exempt entities to certify they’re a beneficial owner or a financial account-holder
    • W-8IMY: used by non-U.S. entities to certify they’re an intermediary or flow-through entity receiving payments on behalf of another person

    Is the process safe?

    The tax information that you provide remains in protected storage designed specifically for financial information, and is only processed as needed to ensure compliance with applicable laws.  All processing and storage is done in accordance with the terms of our Privacy Policy and the provisions of any applicable privacy laws, such as the General Data Protection Regulation (GDPR).

    What happens if I don’t submit a form?

    Udemy will soon begin withholding the appropriate amount from each student transaction/course sale for tax reporting purposes. For Udemy course sales, IRS withholding is required for transactions where U.S. students purchase courses from non-U.S. instructors. If we have your tax form on file, your withholding rate for these purchases will depend on the details of your submission, including whether your country has negotiated a tax treaty with the U.S. For instructors in the U.S. who supply a valid W-9 and are not subject to backup withholding, the rate of IRS withholding is 0%. If we don’t have your tax form on file, we will be required to apply the maximum withholding rate for all sales, regardless of country of citizenship. For more info on withholding click here.

    Should I expect a 1099 in return for the form I submit?

    As Udemy implements withholding, we’ll ensure that you receive a year-end summary of any amounts we’ve withheld from your total payouts. Once we’ve fully implemented our new withholding tax system, we’ll issue you a Form 1099 (for U.S. instructors) or Form 1042-S (for non-U.S. instructors) for each tax year after that.

    I previously submitted my tax forms to Udemy. Do I need to complete this new process?

    There are some requirements concerning the recency of the tax information you provide. We may be are asking you to provide your information again to be absolutely sure we have your most up-to-date tax status. The IRS requires that you submit updated tax information any time your tax status changes (i.e. a change of address or name).

    Can I just fax/email/mail you a copy of my tax form rather than go through this site?

    With tens of thousands of instructors teaching on Udemy today, we need to make sure we’ve got everyone’s tax information stored securely, in one place, in the same format. This means that we’ll be requiring all tax information be submitted through the Comply Exchange platform (taxforms.udemy.com) moving forward.

    Where can I find more information on tax forms?

    The U.S. Internal Revenue Service (IRS) provides instructions in English for its tax forms that our tax form tool supports:

    Since Udemy is unable to provide tax advice, we recommend that you consult with a tax advisor to ensure you’re using the right form and entering information correctly. 

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  • What Does Udemy do With my Tax Information (i.e. Withholding)?

    What is IRS Withholding?

    Withholding tax is a type of tax on income derived from certain types of sales. Withholding is distinct from sales tax, which is paid by the consumer on purchase of an item (like a course). Sales tax is charged to students at the point of sale. Withholding is calculated at the time of payout.

    As a U.S.-based company, Udemy has to follow guidance from the U.S. Internal Revenue Service to determine if tax should be withheld from instructors’ monthly payments.

    What will my withholding rate be?

    Generally, IRS withholding only applies to course purchases made by students from the U.S. Your rate of withholding will depend on a number of factors, most importantly your country of tax citizenship. We can’t tell you exactly what rate of withholding will apply to your Udemy earnings until your form is submitted and approved, but when we do begin automatically withholding, you’ll be able to see the rate in your revenue report. 

    If we have your tax form on file, your withholding rate for these purchases will depend on the details of your submission, including whether your country has negotiated a tax treaty with the U.S.

    For instructors in the U.S. who supply a valid W-9 and are not subject to backup withholding, the rate of IRS withholding is 0%.

    If we don’t have your tax form on file, we will be required to apply the maximum withholding rate for all sales, regardless of country of citizenship.

    What happens if I don’t submit a tax form?

    Udemy is giving all instructors time to fill out the necessary forms. If we don’t have an instructors’ your tax information on file, we’ll pause your next payout and remind you again to submit.

    If at that point we still don’t have your tax information, we’ll be required to default to the highest potential level of withholding on your revenue and we’ll resume sending payouts (no longer holding them), so that we can minimize your risk of noncompliance.

    This might mean that we withhold more from your payouts than the Internal Revenue Service (IRS) actually requires. Depending on your circumstances, there may be avenues for instructors to recoup funds that were withheld in excess of your legal obligation.

    Udemy will send reminders throughout this process, but completing the form submission now is the best way to avoid any late complications.

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  • How do I Submit my Tax Forms to Udemy?

    Overview

    Udemy has partnered with Comply Exchange to help instructors navigate the form submission process more easily and securely share their tax documentation. 

    Note: Udemy is not able to provide tax help or give any advice about what to include in your tax form submission. This guide is intended to help instructors navigate the form submission page. For individual tax advice, please consult a tax professional.

    Where can I find my Udemy User ID?

    You’ll be asked to enter your Udemy User ID in the “Basic Details” section in the first page of the form submission process. This Udemy User ID is required as a unique numerical identifier when submitting your tax information.

    You can find your Udemy User ID in the invitation email you received when you were asked to submit your tax forms to Udemy. 

    If you are not able to locate your Udemy User ID, please contact our Support team at this link, and they can help make sure that you have the right information for your account.

    How can I save my progress in the form submission process?

    After you have selected the tax form type and you have begun to enter information to populate the form, you’ll see the option Save and Exit.

    taxes_save_exit.png

    After Clicking Save and Exit you’ll be prompted to create login credentials for taxforms.udemy.com. You should use the email address associated with your Udemy account. You will also be required to enter the 6 digit (alphanumeric) confirmation code which is automatically emailed after you completed Step I. 

    Finalizing your form submission with your confirmation code

    In the final step of the form submission process you’ll be asked to provide an electronic signature as a final certification. A confirmation code is required in this final step, which is automatically emailed to the address you entered in Step I.

    I can’t find my confirmation code in my email. What should I do? 

    A six digit, alphanumeric confirmation code is required to certify your form submission. If you cannot locate the confirmation code in your email inbox, consider these troubleshooting steps:

    • Confirm that you are checking the email address you entered in Step I of the form submission process
    • Search for an email sent from donotreply@complysandbox.com
    • Check your spam and junk email folder for the message
    • From the final certification page at taxforms.udemy.com, click “Resend confirmation code” and in the pop-up browser message, confirm that the correct email address is receiving the email. Wait up to 5 minutes for delivery of the email. 
    • If the above steps fail, please contact our Support team at this link, from the email address associated with your Udemy account for additional help.

    How will I know my submission has been approved?

    When you’ve completed the final step in the tax portal, you should see a confirmation screen indicating your form was successfully submitted. From this page, you will also have the opportunity to view and download a copy of the tax form that you generated. Each submission will be reviewed upon receipt. If there is an issue with your tax form, we’ll notify you via email.

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  • How Does Udemy Handle VAT / GST?

    The VAT (Value Added Tax) and GST (Goods & Services Tax) is a form of consumption tax on goods and services. The Japanese Consumption Tax in Japan is a type of VAT. VAT / GST rates and regulations vary across geographies.

    Udemy currently handles VAT / GST for all purchases made on the website by students as applicable based on local tax rules. In countries where VAT / GST applies, Udemy displays course prices as “tax-inclusive” and Students in these countries will see the tax-inclusive price as a single total, just as they would for other goods and services sold in their countries. Students will receive an email receipt which breaks down the course price excluding tax and VAT / GST separately.

    VAT / GST on Mobile

    Apple and Google, who run the App Store and Google Play stores, respectively, handle all purchases on the mobile platform and will handle VAT / GST.

    If you have any further questions, please feel free to contact our support team.

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