If you are not a US citizen or resident in the US and you want to publish on Smashwords, Amazon Kindle or CreateSpace, your earnings will be taxed unless you have an Individual Taxpayer Identification Number (ITIN). This means that 30% of your money is kept before you ever see it – and then when you get the payment you have to pay your own country’s tax rate all over again.
Not good, huh? But Amazon will pay you gross (without tax) if you provide an ITIN. So an ITIN I would have.
Boy was it difficult. I had three goes. Yes, three – about as many as my driving test. Then I had another two with the form you then have to send Amazon. And I regard myself as pretty good at following instructions, so this seriously annoyed me.
The problem is, the IRS is incredibly pedantic and doesn’t tell you half the things you need to know. So to protect your blood pressure and stop you spending unnecessary money, I’m going to tell you how to do it.
Acceptance agents
No. Just don’t. If you look on the IRS website they talk about acceptance agents in the UK. Do not touch with a bargepole. I phoned one and they wanted to charge me £500 to handle the application. However, they sounded so ashamed that I persuaded them to tell me the tricky bits I needed to know, like treaty numbers.
Filling in the form
Get a form w-7. You need to know treaty numbers but I’ve outlined them in red in the picture above. I’m in the UK so this is the treaty number I need, but if you’re outside the UK you can find the right number here on the detailed notes for the W-7 form. In the IRS notes it wasn’t clear that two boxes had to be ticked in this question, not one.
Support documentation
You need to supply a letter explaining why you need the number, that you’ve published a book etc etc. (This wasn’t clear in the IRS notes when I originally applied, just so you know how helpful they are.)
This was also a royal pain. At first Amazon told me all I needed was to print out their terms and conditions and my listing. That was rubbish.You need a proper letter addressed to you.
Here, Smashwords led the way. You can ask for the letter after you’ve sold USD$10. Fortunately, Amazon now provide one too. Send this note to CreateSpace Member Services, which you can find on your Createspace dashboard (there is probably a Kindle version of this too, I just chose CreateSpace because they seemed better at replying)
Hi – because I live in the UK I understand you will take US tax off my revenues from selling via Createspace. I want to apply to the IRS for the exemption so that you can pay me gross. I understand I need some documentation from you to support this.
Please could you email me a letter on official Createspace paper which shows:
my member ID number
my name (full name is ;lkjl;kj;lkj, publishing as lkj;lkj;lkj)
a statement that I am publishing through you and that I am a taxpayer in the UK, which is why I need the ITIN
Copying your passport
You need to prove who you are with a notarised copy of your passport, of course. There is only one type of copy the IRS will accept. Not, as they imply on the form, any notarised copy – the kind you can get from the post office or your doctor, even though they are accepted just about everywhere else and you have to pay for them (which is what I wasted money and blood pressure on). You need your passport notarised by an officer of the IRS.
You can find an office of the IRS at the US embassy. If you’re near London, visit them in person. I went there with my form and my CreateSpace letter and a charming chap there filled in everything for me, copied my passport and sent it off. Plus we had a lovely conversation about the time he was a spy working undercover in Hungary. He’s going to write a novel.
Before you wonder if that’s worth the faff let me tell you this – it’s FREE.
If you can’t get to the embassy in person, phone them. Other people I spoke to on Facebook said they did this and hung on for a while and eventually someone answered. They’ll then tell you what to do – though you’ll have to trust the postal service with your passport. But honestly, even if you have to try several times before you get through, it’s much better than spending £500.
Eight weeks later, I had my ITIN.
The final stage – you’re not out of the woods yet
Then I had to send another form to Amazon, a W-8BEN (you can download this from the IRS website) .
Two things to remember:
1 use blue ink
2 do not abbreviate the country name, even though the space for it on the form is tiny. Believe it or not, my first go was rejected because I did this and I had to post another one to the US. The neighbours all heard as I leaped about, spluttering ‘do you mean to tell me these people can’t tell that UK means United Kingdom? And they have jobs?’ But the IRS is looking for reasons to reject. And not following these footling rules will get you rejected.
Find an example of exactly how to fill in W-8BEN here.
Good luck!
Released this week: My Memories of a Future Life, episode 1 The Red Season ‘Groundbreaking… expect the unexpected’
#1 by JM Merchant on August 31, 2011 - 11:49 am
Oh boy! I think I’ve just gone off the idea of e-publishing! If I ever get that far…
Glad you finally got it sorted though, despite the hideous amount of stress you had to go through to do it.
Jo
#2 by rozmorris @dirtywhitecandy on August 31, 2011 - 12:11 pm
It was a nightmare. I’m still rather pleased with myself for getting it done.
#3 by Ramona on February 11, 2012 - 11:45 pm
Hey EVERYONE. Take a deep breath. You don’t need an ITIN AT ALL.
I live in Canada and my friend lives in Britain. AND, if you just call your US embassy on the phone and tell them that you are the
‘SOUL PROPRIETOR’ as an author who sells books, then they have to give you a number over the phone. It’s an EIN number and it’s for the IRS to track your taxes. Amazon accepts this number. I know because they took the hold off of my cash. Don’t believe all that BS about having to have a company or any employees to get an EIN. I timed my phone call and I had the number written down on a post-it note within 11 minutes. That’s it, that’s all. Call your local US consulate or the nearest one to you and say:
“I am the soul proprietor and I sell a product in your country (US) and I want to pay you taxes. I need an EIN number please.” After that, they will walk you through some simple questions and just tell them that you son’t have any employees, but you may hire some at a LATER DATE. Anyway, the lady I spoke to in Seattle was awesome.
Technically, it is a business because you are creating and selling a product. Amazon is just your distributor. If you happen to get someone on the phone that tells you otherwise to anything I’ve said here, they don’t know what they are talking about, so just call back and get someone else. In fact save yourself the headache and just call the US embassy in Seattle Washington. Have a great day and stop wasting your valuable time and money. 11 minutes folks!!
#4 by rozmorris @dirtywhitecandy on February 12, 2012 - 8:47 pm
Excellent update, Ramona – thank you!
#5 by HOC on February 15, 2012 - 12:16 pm
That sounds somuch easier, but does the EIN still allow for the tax treaty? I.e. does it mean that Amazon/Smashwords etc. would stop withholding 30% of your earnings?
#6 by rozmorris @dirtywhitecandy on February 15, 2012 - 1:22 pm
Not knowing anything about US tax terminology I am running at the limits of my knowledge here! It’s just occurred to me that Ramona’s case may not be equivalent. Are Canada citizens treated as Americans for tax purposes? Is the number she has – the EIN – for people how would normally pay US tax, ie is it no more than a code for a US taxpayer to get paid gross? The ITIN is needed for people outside the US.
At first I was getting confused because Ramona mentioned the term ‘business’ – I do know there is a business equivalent of the ITIN, and a friend of mine got one over the phone. It may or may not be the EIN.
#7 by tibor michaels on February 20, 2012 - 12:17 pm
Hi Ramona and hi Roz, I Iive in Italy and I should like to go for the EIN number, specialy since I have an US Ambassy here in Milan.
But …an EIN number makes me subject to US taxes right? Or can I ask to respect the international treaty with an EIN? I do have to pay taxes at home in italy anyhow.
I’ve enjoyed your clear description! Really helpful.
tibor
#8 by rozmorris @dirtywhitecandy on February 20, 2012 - 3:13 pm
Hi Tibor – I don’t actually know about the EIN. I know the ITIN allows you to be paid gross, on the condition that you will pay the tax in your own country. You can get the ITIN if your country has a tax treaty with the US – I don’t know if Italy does but it should be easy for you to find out.
Sorry I can’t be any more helpful but hope you can find the missing pieces of info. You might be able to find out a lot more if you call in at the US embassy. Anyway, good luck and thanks for your comment!
#9 by David Gaughran on February 21, 2012 - 3:12 pm
Thanks for the advice. I tried this today, and it works. I got my EIN over the phone (and I’m in Ireland).
My local embassy (Dublin) couldn’t help but directed me towards the relevant IRS office in Philadelphia (which is for all foreign entities applying for EIN numbers).
A caution: there is a 50/50 chance they will try and make you fill out a Form SS-4. You do NOT want this as it involves arcane form-filling, submitting it by fax (I wouldn’t even know where to find one), and further delays. One guy tried to make me do this, so I just called back and got someone more helpful.
In summary:
1. Call the IRS at 1-267-941-1099 (and press 2 on the computerized menu).
2. Tell them your are applying for an EIN for a foreign entity.
3. If they tell you that you need a Form SS-4, hang up and start again. If not…
4. Tell them that you are a sole proprietor (or whatever is applicable).
5. Give your details (name, address, etc.)
6. They will ask if this is for compliance with witholding – say yes.
7. They will ask if this is for e-books – say yes.
8. They will give you your EIN!!!
#10 by rozmorris @dirtywhitecandy on February 21, 2012 - 7:42 pm
Hello David!
How funny that you should comment here and at this time. I’ve just been for a run and I was listening to your interview with Joanna Penn. A pleasure to connect.
Thanks for that info – would you also be able to supply the missing part of the puzzle? Why EIN and not ITIN?
Roz
#11 by David Gaughran on February 21, 2012 - 7:50 pm
Hi Roz,
How serendipitous!
Now, I’m the furthest thing from being an expert on this, or an account, or a lawyer, or anything remotely like that. But my understanding is that an ITIN is only *required* if you’re published by a trade publisher.
Self-publishers qualify for EINs because they have set up their own company and are distributing their own products (books!) in the US. The IRS appears to have a special section for “foreign entities” seeking EINs, and that number above is the direct line.
Someone with more knowledge might be able to explain “why” in a little more detail. But it works. (And I only found out after I had paid for the notary etc…)
Dave
#12 by rozmorris @dirtywhitecandy on February 21, 2012 - 8:46 pm
If it works, it works! Thanks, Dave
#13 by catherineryanhoward on August 31, 2011 - 11:54 am
Thanks so much for this, Roz! I’m experiencing this headache right now, as you know.
Re: the copy of your passport. I got mine notarized by a solicitor and sent it off, feeling quite smug about my ability to follow the ridiculously complex (and yet, paradoxically, horrendously incomplete) instructions of the IRS. The nearest US Embassy is an expensive day trip away for me, and I wouldn’t trust An Post (Irish postal service) with my passport. Of course, it came back.
However it seems that there is another option. If you don’t have access to an IRS agent, you can still apply with a standard notarized copy of your passport PLUS an “apostille.” I will be finding out exactly what this looks like next week but it’s basically a certification by the Consular Office that says, “Yes, this is really a copy of an Irish passport.” Luckily Cork has a consular office – the passport office, so that’s a bit easier for me. I’ll let you know if that – form, CreateSpace letter, notarized copy plus apostille – gets past the IRS gates and if not, I’ll have no choice but to visit the embassy.
Nightmare!
#14 by rozmorris @dirtywhitecandy on August 31, 2011 - 12:12 pm
aha! Thanks for adding that Catherine! And if you ever do have to come over to these shores (assuming that’s the destination you’re thinking of) we should have coffee!
#15 by Glynis Smy on August 31, 2011 - 11:57 am
Thank you so much for sharing your experience! What valuable advice.
I haven’t a hope! That sounds an incredible process just to sort out the tax, Roz. I will have to make a four hour round journey to the embassy. The post overland here is not great (tired donkey). I also do not want my passport floating around.
#16 by rozmorris @dirtywhitecandy on August 31, 2011 - 12:14 pm
Sounds as if you might as well attach it to an olive branch and put it in the jaws of a dove, Glynis! It was an incredible palavar. I’ve been at it since March.
#17 by Sarah Ketley on August 31, 2011 - 11:58 am
I have several words for this process mentioned above. None of them pretty.
that sounds totally VILE. How horrid.
I really hope I don’t have to do that as well.
Thanks for posting the little run through, i’m sure plenty of people will find is very useful.
have a fab day
sarah
#18 by rozmorris @dirtywhitecandy on August 31, 2011 - 12:14 pm
Absolutely, Sarah! And it’s only recently that Amazon started to be helpful – my first and second go, they fobbed me off.
#19 by Prem Rao on August 31, 2011 - 12:13 pm
Thanks for sharing this important bit of advice. Most Government processes seem so very simple until you really struggle with them.
#20 by rozmorris @dirtywhitecandy on August 31, 2011 - 12:48 pm
Absoutely, Prem. I started off thinking ‘how hard can it be’? I soon found out.
#21 by Zelah Meyer on August 31, 2011 - 12:22 pm
Thank you so much for sharing! That is duly bookmarked for future reference (and, if circumstances permit, I may wave my forms in front of you when the time comes!)
#22 by rozmorris @dirtywhitecandy on August 31, 2011 - 12:49 pm
Zelah, I’ll have forgotten all that by then, so book mark this post now! Although I won’t have forgotten how frustrating it was.
#23 by pippajay on August 31, 2011 - 12:46 pm
Dammit! I did mine thru the post office, now I’ll have to do it all again! Thanks for the post, tho, at least I should get it right next time.
#24 by rozmorris @dirtywhitecandy on August 31, 2011 - 11:45 pm
Annoying isn’t it? Especially as they don’t tell you on the form!
#25 by Irene Vernardis on August 31, 2011 - 12:48 pm
Hi Roz.
Yep, IRS and all the similar authorities around the world…it seems they exist for tormenting.
Thank you so very much for sharing the information. I really am grateful, since I’m based in Greece and I’ll save a lot of time and trouble when I’ll need it.
Ty ty ty
#26 by rozmorris @dirtywhitecandy on August 31, 2011 - 12:49 pm
My pleasure, Irene. Hope you get one when you need one.
#27 by Jan Hurst-Nicholson (@just4kixbooks) on August 31, 2011 - 1:04 pm
Thanks so much for this info – just enough for me to know that it probably won’t be worthwhile risking losing my passport (which is out of date anyway). Also, as I don’t earn enough to pay tax in my own country this could be another hurdle.
Good for you for your perseverance!
#28 by Chazz on August 31, 2011 - 2:08 pm
Thanks for this. You have suffered for the rest of us.
#29 by rozmorris @dirtywhitecandy on August 31, 2011 - 2:59 pm
I certainly have, Rob!
#30 by Neil Marr on August 31, 2011 - 2:22 pm
It can be a darned pain, Roz. A really fiddly and potentially expensive job. We had to sign up our US-based lawyer as a sleeping, unpaid partner and titular US CEO when he additionally registered BeWrite Books LLC and some imprints in the USA for us last year. Well done that, lady. Bestests. Neil
#31 by rozmorris @dirtywhitecandy on August 31, 2011 - 3:00 pm
Neil, I don’t even understand what some of those terms mean! I imagine it’s even worse for a company than an individual.
#32 by Lissa on August 31, 2011 - 3:02 pm
Oh jeez, I’m an Australian citizen living in the UK and I want to get paid into my Australian accounts and so forth… this is going to be a nightmare. Thanks very much for the tips, I’ve bookmarked this page for when it’s my turn.
#33 by rozmorris @dirtywhitecandy on August 31, 2011 - 7:39 pm
Eek, Lissa, I wish you the very best with that!
#34 by Elspeth Antonelli on August 31, 2011 - 3:30 pm
Thanks for sharing all your hard-won knowledge, Roz! I may be jumping into the self-publishing arena and I know I’ll refer to this post.
#35 by rozmorris @dirtywhitecandy on August 31, 2011 - 7:40 pm
Thanks, Elspeth!
#36 by Wendy Dewar Hughes on August 31, 2011 - 3:37 pm
Thanks for the great information. I have been thinking of publishing with Createspace but you have given me second thoughts. I live in Canada so I will have to check if I can get my book onto Amazon.ca (the Canadian version) without the IRS being involved.
#37 by rozmorris @dirtywhitecandy on August 31, 2011 - 7:44 pm
Interesting point, Wendy. You can specify the territories for Kindle – I don’t know if you can do that for CreateSpace but then I’ve never looked. For .co.uk I get paid gross, and for .com they take tax off. But .com is by far the bigger market – also the postage charges to customers in territories outside the US are ridiculous. But maybe that only counts if you have to cross water – overland it might be different.
The IRS tax withholding doesn’t make your own tax situation difficult, it’s just keeping money that they shouldn’t keep – and that you will be taxed on in your own country anyway.
#38 by Carla Monticelli (@ladyanakina) on August 31, 2011 - 5:43 pm
Oh my, what a hard work! I will bookmark this post as well.
I was wondering whether I have to go through this process if I decide to self-publish with Lulu.com. Even if there is an Italian version of Lulu (I’m based in Italy), I’ve read in the FAQs about the issue concerning US taxation, as it is actually a US publisher.
#39 by rozmorris @dirtywhitecandy on August 31, 2011 - 7:55 pm
Lulu at the moment don’t go through the IRS. They pay gross by cheque or Paypal. However, I stopped using Lulu as they were monumentally incompetent. Although their print quality was lovely, they deleted my listing for Nail Your Novel on Amazon – not once but twice. All my links that had been built up through careful marketing around the whole internet stopped working.
Lulu customer service was appalling. CreateSpace customer service is very helpful and they are very obliging and good at problem solving. Lulu, though, kept claiming that they didn’t know what was wrong, and saying they were as mystified as I was. I told them they were running a business and I was paying for a service and they’d just harmed my business by deleting my listing. They did precisely nothing until I started contacting them in public on Twitter and Facebook. One evening they told me off on Facebook for being negative, which I then had rather a lot of fun with. Made some good friends with people who were also being treated badly by them!
Eventually they restored my listing but my five-star reviews had gone. Lulu claimed Amazon wouldn’t restore them. I told them that was ridiculous, it was only a computer system, and another round of excuses started. By this time, quite a lot of other customers had lost listings and reviews, so after a few more very entertaining exchanges on social media Lulu gave in and I got my reviews back. Honestly, do not trust them as a viable means of selling your book. Not even bargepoles should go near.
#40 by Jacqueline Windh on August 31, 2011 - 8:22 pm
Thank you for sharing this info Roz – you are doing a great service to our global writing community by doing so. The more we help one another like this, the better it is for all of us.
Thanks again!
#41 by plantainperiodicals on August 31, 2011 - 10:23 pm
Posts like this are literally gems! A God send! Thank you.
#42 by rozmorris @dirtywhitecandy on August 31, 2011 - 11:46 pm
Thanks!
#43 by Sally on September 1, 2011 - 9:56 am
Hi Roz,
Thanks very much for this post. I was aware of this, having had to deal with the W8-BEN forms at Zazzle (though there you register as a business, and not an individual, so W7 wasn’t required). Like several of the posters here, I think what you’ve described is enough to put anyone off applying! Plus, I don’t have a valid passport and can’t be bothered to renew it. Hmmm … I’m going to rethink my options. I’m off to see what UK publisher options (aside from Lightning Source) are available. It’s a shame though, because I do really want to publish on Kindle.
#44 by rozmorris @dirtywhitecandy on September 1, 2011 - 11:59 pm
Sally, don’t let that put you off. Just do as I said in the post and you should get the number. Once you’ve forged a passport, of course.
#45 by Sally on September 2, 2011 - 10:18 am
Oh, please don’t mind my negative post Roz. I am still rather interested in the Kindle option. Thinking it over again last night, I figured I can always start with LS (paperback) and release on the Kindle a little later. In fact I might do what I’ve seen before, and make the first part available for free, until I can sort out the IRS end of things.
Actually, there’s one thing I don’t understand … see my new post below.
#46 by jjdebenedictis on September 1, 2011 - 8:32 pm
HUG.HUG.HUG! Thank you, thank you, thank you!
I’ve had one go-around with the IRS and didn’t want to attempt another until I figured out (and they do NOT make it clear) what had gone wrong with the first one. As it turns out, that letter you mention.
Thank you for laying out, in a clear fashion, how to jump through these hoops. I will link to this post from my blog and twitter accounts; this information is valuable.
#47 by rozmorris @dirtywhitecandy on September 2, 2011 - 12:00 am
My pleasure – when I was looking for information myself, I badly needed all the info under one roof. I swore then that once I’d got it I’d write this post.
#48 by Stuart Wakefield on September 1, 2011 - 8:42 pm
I noticed that you didn’t tick box ‘h’ even though you filled in the line after it.
Any self-respecting IRS employee would have rejected your incomplete form
Seriously though – THANK YOU. I’m just starting this process so it’s beautifully timed.
Stu
#49 by rozmorris @dirtywhitecandy on September 2, 2011 - 12:02 am
Rumbled, Stu! That’s in fact form no 2. Form no 3 was filled in by the lovely IRS guy while he told me about escaping from Hungary with a panicking agent who’d just shot two other panicking agents. We were so engrossed it’s a wonder the form was filled in properly at all. He’s got a great book in him.
#50 by Sally on September 2, 2011 - 10:23 am
My question (open to all!): I noticed that these IRS rules have been brought into force last year. Does it affect only those companies that have international clients (i.e. Kindle, CreateSpace etc.), or individuals who sell to US customers in general? I’m pretty sure it’s just the former; so, I’m thinking that in theory, one could create a Kindle book without being signed onto the Kindle program and sell them off their own site. I know it wouldn’t suit most writers, as they would prefer to be listed in the Kindle store on Amazon itself, but could this be a temporary workaround?
#51 by rozmorris @dirtywhitecandy on September 2, 2011 - 10:32 am
My guess is that it’s only middlemen like Amazon. If you sell to people from your own website you’re governed by your own country’s tax laws. So that could be a workaround – but of course you don’t get the exposure and you have to set up a Paypal thingy on your site (not too difficult). Anyone else?
#52 by Sally on September 2, 2011 - 10:48 am
Thanks Roz! That helps a lot. Yes, I figured that too (about the lack of exposure issue). It happens I do have Paypal set up on my site for my non-fiction anyway, so that part wouldn’t be a problem.
#53 by sylvie laflamme on September 3, 2011 - 1:06 am
ohhhh thank you very much for this great article. It’s the first time I read about it. Oufffffff…..
#54 by Joanna Penn on September 9, 2011 - 11:59 am
Hi all,
I just wanted to add that if you are publishing as a company, you need to do an SS-4 and get an Employer Identification Number (EAN) instead. I was able to do this on the phone after being on hold for an hour but it wasn’t too hard. Then you put that number onto the W8-BEN with affidavit which will mean they don’t hold the tax and they send back the tax withheld so far. You need a W8-BEN per distributor e.g. one for Amazon and one for Smashwords.
Thanks, Joanna
#55 by rozmorris @dirtywhitecandy on September 9, 2011 - 12:27 pm
Thanks for that, Joanna. I know a number of people who will find that tip immensely helpful (Dave, for instance!)
#56 by alexlaybourne on September 9, 2011 - 12:50 pm
wow… that sounds like a complicated and drawn out process. But I am sure well worth it when you think of the extra tax you would be paying.
I have published via Amazon Kindle and Smashwords. I will have a better read of this post tonight and see what I can do.
Do you know if the process would be the same for someone in the Netherlands? I am British and have a British passport but I guess it goes on Tax Authorities and not Nationality.
Thanks for sharing this information with us.
#57 by rozmorris @dirtywhitecandy on September 9, 2011 - 1:05 pm
I don’t know, Alex – I guess it’s governed by what country you pay tax in. But the rules about what authority the IRS will accept probably still hold. And it is definitely worth it. good luck.
#58 by John Walters on November 1, 2011 - 10:21 am
It would be good to clarify above where you say “if you are outside the US” – and add if you are not a US citizen or resident. I am a US citizen but a resident of Greece, and I publish on Kindle, Createspace, and Smashwords. Yearly I do tax forms for both US and Greece. In my case I am not eligible for an ITIN; I use my SSN. Someone sent me this post and it caused me a lot of confusion until I realized it applied only to non-citizens. My freelance income (haven’t had to declare it yet) goes only on the US form. But is the 30% tax standard for writers in the States too? Freelance income is only supposed to be taxed if it exceeds $400 a year.
#59 by rozmorris @dirtywhitecandy on November 1, 2011 - 1:49 pm
Good point, John – and I shall clarify immediately! Thank you very much for your feedback.
As for your question about whether 30% tax is standard in the US, I have no idea. All I know is that Amazon and Smashwords hold back this percentage, saying it is tax, unless you get these numbers.
#60 by bob devon on February 12, 2012 - 7:54 pm
This helped me to obtain a IRS number at my 1st attempt. Thank you so much Roz, saved me a fortune. All the other people that keep on about passports,out of date or getting lost, you can use a driving licence, like I did.
#61 by rozmorris @dirtywhitecandy on February 12, 2012 - 8:45 pm
First attempt – result! And I didn’t know you could use a driving licence – thanks for sharing that.