The 30% US withholding tax on platform revenue — and how a treaty cuts it

If you sell games through US-based PC game storefronts, mobile app stores or console storefronts and your studio sits outside the United States, you may notice that the money arriving in your account is smaller than the revenue share you expected. A slice has often been held back before the payout ever leaves the platform.

That slice is US withholding tax. This guide explains, in general terms, why it applies to a non-US studio, how a tax treaty between your country and the US may reduce it, and how to read the forms you receive. It is general information, not tax or legal advice, so confirm your own position with a qualified adviser.

Why 30% is withheld in the first place

US-source income paid to a foreign person — known as FDAP income — is generally subject to 30% US withholding tax. Royalties sit squarely within that category, and a non-US studio's revenue share from US platforms is generally treated as royalty income.

Some major storefronts, for example, state that they are required by the IRS to withhold tax on the revenue-share payment, with the rate ranging from 0% to 30% depending on the tax interview you complete. The platform acts as the withholding agent: it deducts the tax and pays it to the IRS before the rest reaches you.

How a tax treaty can reduce the rate

The US has income tax treaties with many countries. Where a treaty exists between your studio's country of residence and the US, a reduced withholding rate — sometimes 0% — may apply to royalty income. The exact rate depends on the specific treaty and the type of income.

The reduction is not automatic. You generally have to claim it by completing the platform's tax interview correctly and certifying your eligibility. Get the certification wrong, or skip it, and the rate typically defaults back to the full 30%.

The forms that document what was withheld

Non-US partners generally receive IRS Form 1042-S, which reports the gross amount paid and the tax withheld for the year. Platforms typically issue it by 15 March for the prior year. US-based partners receive a 1099 instead.

Keep these forms. They are the record of tax already paid on your behalf, and your adviser may be able to use them when working out your position at home — for example where your country gives relief for foreign tax paid.

A common misconception about ITINs

You will sometimes read that you need a US individual taxpayer identification number, an ITIN, to claim treaty benefits. For a studio operating as a company, that is not generally the case. An entity claims treaty benefits on Form W-8BEN-E and supplies a tax identification number — which can be a foreign TIN or a US TIN — rather than an individual ITIN. The advice that you must obtain an ITIN often comes from guidance written for individual creators, not companies.

Because the detail varies by entity type and country, check the precise requirement with your adviser before starting any application. Applying for the wrong identifier can cost weeks and will not, on its own, reduce the rate that is being withheld in the meantime.

How Altery fits

Altery does not file your tax or change what a platform withholds — that happens upstream, before any money reaches you. What Altery can do is make the net payout easier to handle once it lands. You can receive USD, EUR and GBP into multi-currency accounts, hold the currency rather than convert on the platform's timing, and run FX on your own schedule.

Because withholding reduces what you actually receive, clean reconciliation matters. Real-time balances and dedicated pots let you ring-fence amounts you expect to owe at home, and per-entity accounts keep each studio's platform income separate for your accountant. Altery is not a bank and offers general information, not tax or financial advice.

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