U.S. Withholding Tax on Royalties (For Non-U.S. Artists)

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If you are a non-U.S. artist and your music generates royalties from the United States through any U.S.-based distributors such as The Orchard, U.S. tax law requires withholding tax on certain payments.

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How It Works

• The U.S. government requires a 30% withholding tax on U.S.-sourced royalty income paid to non-U.S. residents.

• This tax is deducted before royalties are paid out to you.

• For example, if your music earns $1,000 in U.S. royalties, $300 may be withheld for U.S. tax, and you would receive $700.

 

Why 30%?

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The 30% rate is the standard U.S. federal withholding rate on royalties paid to foreign individuals or companies.
Some countries have tax treaties with the United States that reduce this rate — however, Kenya currently does not have a tax treaty with the U.S. covering royalty income, so the standard 30% rate generally applies to Kenyan artists.

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Required Tax Forms

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To confirm your foreign (non-U.S.) status, you must complete the appropriate IRS form:

• W-8BEN (for individuals)

• W-8BEN-E (for companies)

These forms do not eliminate the tax, but they ensure you are taxed correctly under U.S. law and prevent backup withholding issues.

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Important Note

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This withholding applies only to U.S.-generated royalties. You may still have tax obligations in your home country. In some cases, you may be able to claim a foreign tax credit locally for taxes already paid in the U.S. (please consult your tax advisor).