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I'm located in the UK and sell apps through Apple App Store, Google Play etc. I have completed W8-BEN forms at the request of Apple, Google.

Now I'm looking to invest in US stocks, to do so, I need to answer a few questions for my stockbroker, one of them is:

Are you receiving income that is effectively connected with the 
conduct of a trade or business in the U.S.?

My question is, do these app sales and royalties mean that I am receiving income connected to the U.S?

I've tried the IRS website ECI section, but it hard to understand. I've also made an international call to the IRS, who did not know the answer.

Any help would be appreciated.

  • Apple have region-specific app stores - so presumably your apps are on the UK app store and therefore generate UK income? – Sam Feb 8 '17 at 14:21
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I believe the answer is no, since your income from royalties and app sales would fall under FDAP income. (another conformation of this would be the fact that Apple and Google requested a W8-BEN form from you and not a W8-ECI form)

Generally, All income EXCEPT FDAP income (fixed or determinable annual or periodical income) are ECI income. FDAP income includes income from interest, rent, dividends etc.

IRS link to a list of all Income classified under FDAP below:- https://www.irs.gov/individuals/international-taxpayers/fixed-determinable-annual-periodical-fdap-income

https://www.irs.gov/pub/irs-pdf/iw8eci.pdf (page 3 - under effectively connected income)

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