Anyone ever have to fill out a "RF 3 EU" Form For France Before?

[masterchief34]

I'm just starting to do freelance photography work and recently I was contacted by a french magazine looking to purchase some of my work to print in their magazines. While trying to work out an agreement and make sure things get done the right way, they mentioned a 33% french tax on royalties/copyrights. They've sent me an application for reduction of/exemption from French taxes on royalties/copyrights (FORM RF 3 EU / n 5505) and asked that I fill it out and send it back.

The form seems pretty straight-forward, but I just want to make sure I do this correctly to make sure no problems arise down the line.

Here's the PDF form I received: http://www.filedropper.com/papiersadmistratifphotographesus_1

Tell me if I'm correct with this. There's 3 copies that needed to be filled out (one for IRS, one for the French tax administration, and one copy for myself). I fill out page one of each document (as the recipient) and page 2 is for the magazine to fill out (as the debtor making the payment). So what do I do with page 3 of the document (which is actually page 4 of the PDF document)?

I took the form to my local US Internal Revenue Service office on Wednesday to have it looked over, but the woman there looked baffled by it (she said she's never seen one before). She said she believes I have the right idea (that I fill out page 1 of the document, the magazine does page 2, and then the magazine then files everything (page 3 gets filled out later I guess). But since she wasn't too sure I figured I'd check to see if any of you guys have been down this road before.

Any help would be greatly appreciated.

Thanks

[sfaust]

Who is the magazine? Are you sure its legit? I've heard of similar scams used to get the information necessary in order to steal ones identity. All the info they need is in the forms they are asking you to fill out. I'd make sure I spent the time to make sure they are legit before sending out that form.

Just a word of caution based on stuff I've seen circulate in the past.

[Karl Johnston]

I have sold images to magazines and printers in the UK, not france, though I have not ever seen something like that before. The only forms I ever got were the contracts and payment terms, duration and type of payment. A basic licensing agreement, I don't know much about foreign tax law though...I find it unusual there is no mention on those forms (a header of some kind) of the company or magazine.

Mind you I am Canadian, though I find it a bit fishy they would be taxing you..why not take it out of their taxes on their end? Why do they need your SS number? Wouldn't it be tax excempt anyway? I don't know how it works in the USA. Why can't you just file it under your taxes yourself? I'm no lawyer and math baffles me though maybe you may want to consider talking to one that specializes in taxes.

Sounds like crap ..what happens when a french magazine buys from a microstock site like getty or corbis? Does the same thing happen?

[Nightstalker]

Check out the following :

Text of the TAX treaty - esp. Secion 12 Royalties :

http://ambafrance-us.org/spip.php?article704

Also

http://www.allbusiness.com/legal/tax-law-tax-treaties-agreements/13380029-1.html

As this indicates that the treaty is soon to change to remove any withholding on Royalties.

Hope this helps

[Nightstalker]

Here is the text for all...

..........................................

Article 12 Royalties

1. Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

2. Such royalties may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the beneficial owner is a resident of the other Contracting State, the tax so charged shall not exceed 5 percent of the gross amount of the royalties.

3. Notwithstanding the provisions of paragraph 2, royalties described in subparagraph (a) of paragraph 4 that arise in a Contracting State and are beneficially owned by a resident of the other Contracting State shall be taxable only in that other State.

4. The term "royalties" means:
(a) payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic, or scientific work or any neighboring right (including reproduction rights and performing rights), any cinematographic film, any sound or picture recording, or any software;
(b) payments of any kind received as a consideration for the use of, or the right to use, any patent, trademark, design or model, plan, secret formula or process, or other like right or property, or for information concerning industrial, commercial, or scientific experience; and
(c) gains derived from the alienation of any such right or property described in this paragraph that are contingent on the productivity, use, or further alienation thereof.

5. The provisions of paragraphs l, 2, and 3 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State, in which the royalties arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the royalties are attributable to such permanent establishment or fixed base. In such case the provisions of Article 7 (Business Profits) or Article 14 (Independent Personal Services), as the case may be, shall apply.

6.
(a) Royalties shall be deemed to arise in a Contracting State when the payer is a resident of that State.
(b) Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties was incurred, and such royalties are borne by such permanent establishment or fixed base, then such royalties shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.
(c) Notwithstanding subparagraphs (a) and (b), royalties paid for the use of, or the right to use, property in a Contracting State shall be deemed to arise therein.
(d) Royalties shall be deemed to be paid to the beneficial owner at the latest when they are taken into account as expenses for tax purposes in the Contracting State in which they arise.

7. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties, having regard to the use, right, or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention.

..........................................

Personally my reading of clause 3 is that in this case no tax should be payable in France :

3. Notwithstanding the provisions of paragraph 2, royalties described in subparagraph (a) of paragraph 4 [this is us] that arise in a Contracting State [France] and are beneficially owned by a resident of the other Contracting State [USA] shall be taxable only in that other State [USA].

Better to consult an accountant though - my gut feel is that this is a scam (albeit a clever one) to get personal information as even if tax is payable in France Clause 2 of the treaty limits the amount payable to 5% in any case - the 33.3% rate stated in the form you recieved is crap.

[Box Brownie]

Surely making contact with the French Embassy or Consular Offices will get you on the right track and if this is a scam of some sort "they" will I would I hope wish to know about it and act on it as needed back in France???

[Nightstalker]

Was this issue ever resolved?