What are the legal / tax implications for owners having ownership of Glimesh?

This thread is to discuss the ongoing project to bring the community on as part owners of Glimesh, make sure you check out the original thread before contributing to this conversation!

We need to understand how people who choose to own some of Glimesh are impacted. What special tax details do they need to know about, how can we help that process?

1. UK Specifically

I had a quick look for how it works for UK residents on the HMRC (our home office/tax office) this morning.

The outcome is broadly that foreign income must be reported for tax as a self employed person. UNLESS 3 criteria can be met simultaneously. In this sense, for the UK at least, anyone working or who has another income source would need to file a self-assessed tax return at the end of each year for dividends, this in effect registering as self-employed in addition to any additional jobs.

If they do not have additional income, the only pay out is dividends from the foreign company and earnings and the dividends are less that £2,000 they would not need to do this. (same rules for reporting and registering any form of self employment).

Its important to note that given the way the UK tax system works, even if dividends aren’t paid out because theres no profit its likely you would still have to register and file that tax return - and just declare that the money gained was £0. (unless all 3 of the above factors are met) Because it still has to be declared legally even if theres no earnings from it. (again, some as any form of self employment when additional income is at play)

In so far as I am aware tax would be as normal in the UK, if they work another job the self employment would likely be taxed on a high rate as a second income.

Sources: Tax on foreign income: Overview - GOV.UK | Tax on foreign income: Reporting your foreign income - GOV.UK | Tax on foreign income: Foreign income that's taxed differently - GOV.UK

I am no tax or legal expert and would advise consulting one.

More information on a deeper level relating to foreign tax in the UK is here: Self Assessment: Foreign (SA106) - GOV.UK

2. This next section is broadly for all international people:

However for the fact Glimesh is a US company and from that side it would seem Glimesh is legally required to take witholdings for any dividends as it would be subject to US tax - These withholdings vary from 30% depending on any treaties in place with foreign companies.

Source: United States - Corporate - Withholding taxes

This part reminds me of the early days when we had the registration forms for the sub button and you were required to put your witholding amount on the forms, and in the earlier still days where it was asking for your UTR number if you were from the UK - which requires self-employment status. To offer up some direction for you clone in terms of what kinda thing may help you have some additional information to look at.

3. Back to the UK again:

There are contingencies for any taxes paid in such a way for the UK to be claimed back via the HMRC for specific circumstances where double taxation isnt a required thing - Although I am unsure whether double tax would be required or necessary but it’s still important to note that.

Source: Tax on foreign income: If you're taxed twice - GOV.UK

1 Like

I guess the good news here is we already have a mature setup in paying people and taking withholding into account. The W-8BEN every US foreign streamer with payouts already fills out can be used to deliver dividends in addition to the regular royalties paid out.

Thanks for starting the research here!

1 Like