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.
UPDATE The forms have now been updated and the treaty number is now different. New info on tax treaty numbers is here.
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’
Update:
Residents of some countries can now bypass the initial form-filling and call the nearest US consulate for an EIN. Tell them you are a ‘sole proprietor’ and you are an author selling ebooks in their country. Tell them it is for compliance with tax withholding – and you get the number there and then. Wow. After that you’ll still need the W8-BEN – but that’s one stage of faffing and waiting dispensed with!
Update 2:
The rules have recently been updated, and WilderSoul was kind enough to send me this link of FAQs, including the requirements for support documentation.
Now available: My Memories of a Future Life (The Complete Novel)… ‘Classy, stylish, gripping… profound’
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Nail Your Novel 
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
It was a nightmare. I’m still rather pleased with myself for getting it done.
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!!
Excellent update, Ramona – thank you!
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?
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.
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
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!
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!!!
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
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
If it works, it works! Thanks, Dave
David, do you have to have your book published ( ebook ) self published on amazon first before you can get the EIN number>? I am based in Canada?
Jon – I sent you a message on Facebook, but, in short, I think it’s better to wait until you have actually published. For starters, you will need your various account numbers as a reference for your W8-BEN. I suppose you *could* get the EIN now, but there really is no point, as you won’t be able to send off the W8-BEN to the various retailers without it. I say publish, then sort it out.
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!
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!
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.
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.
I followed David’s instructions and got my number in 28 mins! A valuable post and comments, thanks.
One thing I did do was tell the woman I don’t need an SS-4 form when she mentioned it, and she went ahead and completed it for me!
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
Absolutely, Sarah! And it’s only recently that Amazon started to be helpful – my first and second go, they fobbed me off.
Thanks for sharing this important bit of advice. Most Government processes seem so very simple until you really struggle with them.
Absoutely, Prem. I started off thinking ‘how hard can it be’? I soon found out.
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!)
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.
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. 😦
Annoying isn’t it? Especially as they don’t tell you on the form!
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 😀
My pleasure, Irene. Hope you get one when you need one.
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!
Thanks for this. You have suffered for the rest of us.
I certainly have, Rob!
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
Neil, I don’t even understand what some of those terms mean! I imagine it’s even worse for a company than an individual.
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.
Eek, Lissa, I wish you the very best with that!
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.
Thanks, Elspeth!
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.
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.
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.
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.
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!
Posts like this are literally gems! A God send! Thank you.
Thanks!
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.
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.
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.
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.
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.
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
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.
box H??? is that form no good Roz? Im based in Canada are we meant to fill out box H. I cant even see a box H?
Jon – hope you found it by now, but box H is under ‘Reason you are submitting form W-7’ 🙂
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?
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?
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.
ohhhh thank you very much for this great article. It’s the first time I read about it. Oufffffff…..
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
Thanks for that, Joanna. I know a number of people who will find that tip immensely helpful (Dave, for instance!)
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.
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.
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.
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.
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.
First attempt – result! And I didn’t know you could use a driving licence – thanks for sharing that.
Very helpful post Roz, I’ve been through this myself and have compiled a step-by-step guide for filling in the W-7, which I will happily supply to anyone who asks – but it’s such a good idea to put it up in a blog post like this. I got my ITIN number at the first attempt, thanks to a lot of help from my Publisher (I hadn’t yet self published on Smashwords and Amazon) who happily sent out some helpful information from one of their authors who had been through the process.
The forms can look a bit daunting if you’re not used to filling out forms, but once you get started, and as you say, fill EVERYTHING in, in full, it’s not quite so bad. The other thing is that although you need a W-8BEN for every publishing outlet you have, the W-7 only needs to be completed once, to get your ITIN for the W-8BEN.
My problem was I had neither a driving licence nor a Pasport. (Don’t drive, don’t travel abroad)
I phoned emailed, phoned and wrote to the Embasssy and got no reply. In frustration I asked a friend in the US to enquire for me if they would accept a |UK ‘Citizen Card’. She was able to tell me that they did. A UK Citizen card costs £12 and is replaceable, so I sent the original by post to the Embassy in London, and it was accepted without question. By the time I recieved my ITIN (it tooke them the full 80 days) I needed it for Smashwords and Createspace as well as my Publisher, but as I say, this is just a matter of sending a W-8BEN to each.
I just wanted to let folks know about the Citizen Card being acceptable as proof of Identity.
(Ironically I now have a Passport as well, as I’m due to take a trip to the States in May, which I hadn’t plannedt when I applied for my ITIN!)
Hi Hywela! I didn’t know a citizen card even existed – what an excellent tip! Thanks so much for sharing. And bon voyage…
Hi Roz
Thanks for running with this thread – it is extremely valuable. There’s an e-book in it! Can I add the following questions:
1 – Which option is recommended:
a) Wait for the ITIN or EIN, and then Amazon (or other publisher/distributor) giving the OK to W-8EN, and only then start to upload and publish? or,
b) get on with the publishing asap! That way, you run the ITIN/EIN/W-8EN applications in parallel, and when it is sorted the recipient of the W-8EN (Amazon, etc) will pay any tax that has been withheld? Oh, looking at Amazon’s website, I’d imagine that would only be possible for the current tax year (Jan-Dec in US?), i.e. no backdating if you decide to publish and leave tax red tape for a few years!?
2 – So, in UK, do UK residents only fill in the useful tax forms from HMRC and state the gross revenue from US sales? I’m wondering if the double taxation treaty means not a penny is kept back in the US and so no thickening of the plot by having to fill in an annual return to IRS too!
3 – VAT & e-books: how does that fit in what to pay to whom, and when, etc? What counts as the revenue level for the author/self-publishing company? For the commercially successful I imagine that an eye has to be kept of the threshold for VAT registration, etc?
May I also suggest the Society of Authors website for a free article on tax & USA? Its pdf format, under Resources in the toolbar on the homepage (www.societyofauthors.org). The useful bit could be which advice on which boxes to tick, re treaty etc.
Really like the 100k long, four-part series with weekly releases. How did it go?
with best wishes, and regards
Patrick
Hi Patrick
I am so glad I wrote this post, as clearly it’s helping a lot of people. I’m no expert, just a punter who hit on the right answer after a while, but in that capacity I’ll offer my pennyworth…
1 – I think Amazon – or the IRS – are changing the rules about paying back tax they have withheld. Previously, you could get it back from Amazon if it was all done within one tax year. Now I think you might have to go through the IRS – which to me doesn’t sound attractive. In that case, it might be better to get all the paperwork and form-filling done before you publish.
2 – If you get the ITIN et al, you are paid gross by Amazon. So you’d declare it as gross revenue – or that’s what I’m going to do.
3 – You only have to worry about VAT if you’re registered for it. As I understand it, services to the book trade aren’t VATable – ie you don’t have to charge VAT to a publisher for writing a book. HMRC guidance is here http://www.hmrc.gov.uk/vat/forms-rates/rates/goods-services.htm – although it doesn’t say anything about creative services. As for ebooks, the VAT is being charged by – and kept by – Amazon. It isn’t passed on to you – so that should mean you don’t have to worry about it.
Have the Soc of Authors published about this? How interesting! (Wish I’d known…..)
(Run out of space on this comment, will answer about the novel in a mo…)
Serialisation… The novel serialisation went very well, thanks! It was an interesting creative challenge to make sure the book would work like that – and fun too as I could devise episode titles. Reader responses were great – they really made an occasion of it. A few hours after each episode went up I’d get emails from people who had gobbled it up already and were speculating about what would happen next.
Several months on, a few people are still discovering it by the episodes. Even though the full novel also comes up on Amazon searches, they’re still buying an episode at a time. It’s not the bulk of the sales, but it’s obviously an attractive format for some. That’s surprised me as I’d just prefer it in one go, as would most of the people I know – some Amazon reviewers docked a star from me for messing them about!
The episodes are also useful as promo tools. I’d never put the full novel on Amazon Prime, but I put episode 1 up – and my sales of the whole book have risen. Of course, that might be for other reasons too – we never know for sure how people discover our books.
Hi Roz,
Great article and a *real* help. Filled in my form, queued up outside in Grosvenor Square and took 30 seconds to have it all stamped and sent off.
Couple of additional pieces of info:
The Tax Office in the US Embassy in London is only open Tuesday, Wednesday and Thursday. I happened to get lucky having to be in London Wednesday so was OK.
Also opening hours are 10 to 1 and 2 to 4 only.
Remember to use American date formats! I forgot, and the woman at the counter sighed heavily and put a little squiggle around it. Hope this doesn’t make it come back rejected.
Don’t try (as I did) to get inside the embassy when you have been working overnight and carrying a suitcase containing a laptop, six memory stick, electric toothbrush etc etc. They put my stuff through security eight times. I said I only needed my form but they wouldn’t allow me to leave my suitcase. By the time we were finished and they let me through it had only two items of clothing left inside! Great fun.
Anyway, thanks for the info which proved useful. Now I wait…
Tess
Fab point about the dates and the opening times, Tess! How funny to think of you turning up with all your gubbins and foxing their security. Opening hours have changed since I was there – I got in at 9am, so useful to know that’s now not the case.
Also, what a small world – here we are conversing on a server somewhere in the depths of the US, while you have just been a mere 6 miles away from my house.
Excellent and useful update – I’m going to tweet it.
Hi Roz
Thanks for your very helpful response – and to the continued help this thread is offering.
I hadn’t realised the switch to the IRS may have happened on withholding, and to minimise red tape it might be best to wait for ITIN/EIN, then W-8BEN, as you suggest. I had thought to just get going, to get the first works up, which are ready. But, hey, this is a long game. Need to get those admin ducks lined up for least future hassle (I hope).
I’m still trying to nail the VAT aspect wrt product and income threshold, with particular reference to authors operating themselves, or through Ltd Cos they own. Boring, but want this nailed enough to fix and forgot. I plan to contact HMRC direct. Should be fun.
Can I check something else? I noted that selling in the Amazon.com territory brings payments, in dollars, either to by cheque or to a US-based bank account. What are foreign authors doing? And, are US dollar bank accounts held elsewhere, e.g. in UK, be of no use (would seem so). I imagine everyone is plugging for the postal cheque.
Series fiction: I think that has a big future, and it is an area I’m exploring. There are possibilities there for a real marriage of books to TV-era appetites, and that’s very attractive. Offers possibilities of long-tales split in structured fashion, and with major and minor arcs. Readers would end up getting works that are much longer than even door-stopper print books, i.e. could be 150k+ or 200k+. And follow-up stories. Could do similar in length and approach but instead make the series run more episodic, with each tale more self-contained but having some long development arcs weaving through. Great fun. I’m exploring, and doing, both. There’s also the matter of how the series is run – i.e. have the parts/episodes all written, done & dusted, and then release them at pre-defined close intervals. Each part/episode should be decent sized and offer, in TV-esque approach, a couple of hours or more of entertainment. Perhaps weekly, on first release?
Fascinating, too, that the size (word count) of ebooks is often discussed as ok to be well below common paper back lengths, i.e. fine to go up to 60k-70k+ lengths as opposed to 90k-120k+. Hadn’t expected that, and pleasantly surprised as these e-books have echoes of a few decades ago, of the slimmer volumes written by many prolific crime and sci-fi authors.
cheers, Patrick
Patrick, I get my payments in USD cheques and pay them into my sterling bank account. Other authors I know have opened dollars accounts.
Do come back and report about HMRC and VAT! good to know about different models.
Hi Roz
Thanks, again – it’s really helpful to know how other people have been getting things to work with the joys of the admin side. I haven’t seen any non-US author going the full hog to set up a US-based bank account just to gain electronic transfer. In the scale of things, it’s possibly not a particular issue, as hopefully there would be a pipeline of regular payments and so speed of a few days is not so vital. Besides, more to the point, there is always the slicing off the top that’ll be suffered because of exchange rates to get Sterling. Dollar (& Euro?) bank accounts – worth checking that one, as you mention. Appreciated!
On the different models, I did find it interesting to read about your 4 x 25k weekly publication to tell the 100k-long story, and the reactions/reader responses. Do you know of anywhere else it’s worth checking to read how authors are running with the series concept, i.e. issuing quite regular, and possibly very frequent, numerous episodes or parts in a ‘run’, or season, of a greater story? Perhaps discussing, too, such variables as how often to publish, what size of work (e.g. novella, or smaller), price, etc.
Will let you know re HMRC & VAT etc.
best wishes, Patrick
Patrick, I know Joanna Penn has opened a US bank account for Amazon earnings – find her on http://www.thecreativepenn.com (if you don’t know of her already).
As for other places to talk about serials… I posted on a blog called The Tuesday Serial – here’s my link, but you can branch out from there and see what others are up to : http://tuesdayserial.com/?p=2533
Also, Sean Platt (sorry, I don’t have a URL but you can find him on Twitter) launched a serialised thriller in the vein of Lost, written in weekly episodes. Look him up and you’re sure to find some wisdom. Tell him I sent you!
So far, I don’t see any information for US citizens that live in the UK? Is there anyone that is a US citizen residing in the UK? How does this impact you? How do YOU fill in the form? What can a US citizen do to make sure all is as it should be?
Mercedes, I just put out a tweet to see if anyone can help. Watch this space…
Hello! Thank you so much for such a helpful post.
I’ve followed the EIN route, but am still curious about something. I see you made this post in Aug ’11, so by now I’m pretty sure you’ve run through one US tax year and soon to be one UK tax year. I was just wondering if you’ve ever had to file a tax return, or any forms following the TIN applications, with the IRS?
I’m slightly concerned that I could be racking up random fines for not filing paperwork with the IRS when apparently I should have been (despite not being told). I assume they would tell you (HMRC does, surely the IRS would?), and I haven’t received any communications further than my EIN confirmation letter.
I haven’t actually proceeded with any business other than sending off the W8-BEN just in case I need to cancel the tax ID and get out of dodge.
Thanks in advance…
That’s a good question. I recently received a couple of statements from Amazon that made me wonder about this – titled Foreign Person’s US Source Income Subject to Withholding. They basically showed all that Amazon had paid to me and confirmed that no tax had been withheld. On the back was a note about whether I needed to file a tax return or not, which was perfectly contradictory and left me none the wiser. So I’ll be looking into it – and letting people knoW
Hi,
I’m from Australia and I followed the information below and I obtained my EIN number after only 15 minutes on the phone. Thanks so much for posting this information (see below, I’ve cut and pasted the information I used that was posted further up on this thread #9 David Gaughran) . Thankyou Roz and David for posting this on the www as it really saved me time and gave me the courage to have a go. My paperwork from the IRS is on the way and I should have it in about 3 weeks but my number is valid to use now.
In summary (from David’s post):
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!!!
Cheers, Margo
Thanks, Margo, for reporting in here – and best of luck with your books!
Hi Roz
Sole proprietor – is that only if you’re operating as most folk do, i.e. a self-employed, but not if you are operating through a closed Limited Company (in UK, etc) which you may or may not own most of?
I’m wondering on two counts – 1) EIN is for individuals & businesses; and 2) the possibilities of operating through a Ltd Co (perhaps, or alternative to, self-employed).
Has anyone gone the EIN route, via the fast call route to US (thanks again to everyone for the info, and confirming and refining it!) or otherwise for Ltd Cos?
best regards, Patrick
Update: After receiving my EIN over the phone, I received all of my statements from amazon showing my revenue and NO tax withheld due to a tax treaty between Canada and the US. SO, yes, the EIN works just fine for individuals and it is now up to me to file my income and pay tax within my own country. I went to see my local H&R Block accountant who informed that the EIN is all I needed. Great! SO much easier than doing it any other way. Not sure about other countries, but Canadian authors are not subject to US withholding taxes as long as they have an EIN. The ITIN is actually for US citizens and requires way more paperwork and tax filing annually. Not sure how this whole fiasco started, but I’m assuming that non-US authors had gone to amazon and not read their instructions carefully. They clearly state as of 2011 that they require an ITIN or an EIN. Obviously the EIN is easy to obtain. Best of luck to all!
Ramona that is great to know for Canada. If you have an email i would love to get in contact with you
Hi Roz,
In a state of desperation last week i googled ‘How do i get an ITIN number’ and your blog post and 81 comments popped up at the top. I printed and read everything. Originally i was going to try and complete a W-7 form and i had all the relevant paperwork and letters. But then David had responded with the numbers to call to reach the IRS in the USA and he even explained what to say. I gave it a whirl. I was on hold for about 20 minutes and then finally someone answered and it all went pretty smoothly. I received an EIN at the end of the call and apparently they are sending me all the relevant paperwork. I then completed my W-8BEN form and had this cleared by Ebookit.com and all seems to be good. No sales yet so in truth it is almost irrelevant… but one thing at a time eh?!
Thanks for taking the time to write this post… it was most useful!
Adam
Thanks, Andrew – this post seems to be helping a lot of people and it’s lovely when they leave a little note. good luck with your publishing
Thank you Roz! Exactly the sort of advice I was looking for, and most helpful. Much appreciated.
Thank you, Anne – and I’m honoured to have you here. In fact, fainting a little – I used to love your Time Out reviews.
By the way, if anyone else from Brussels is reading this – you have to set up an appointment with the US embassy (their website is quite helpful) who will provide you with an offcial notarised copy of your passport to send off with your W7. And take an old-fashioned book to read while you wait – they won’t let you take Kindles (or any other e-reading devices) into the waiting room!
As mentioned on 9th March I applied for the EIN, number. Just to update, today 23rd April the official paperwork arrived in Cyprus. So all appears to be working smoothly outside of UK and US.
Thank you so much for this fantastic post and all the responses. I am in the UK and had been going insane trying to get a tax number and Amazon don’t make it very clear at all and the US tax office even more so. My book will be published in a couple of weeks and I am just a sole trader, so thanks to Ramona for updating on the EIN number as this will be much easier to get. Hurrah 🙂 will call US Embassy tomorrow and then I can send my W-8BEN form into Amazon and hopefully
Thank you, thank you, thank you
Joanne
Glad to have helped, Joanne – good luck!
This is brilliant info – thank you! xxx
Thank you, Rose! Best of luck
If you visit this site:
https://kdp.amazon.com/self-publishing/help?topicId=A1VDYJ32T5D3U4
You will see the following:
“Information on how to apply for a TIN with the IRS is available at the IRS website. For non-US persons, a TIN may be an EIN (for individuals and businesses) or an ITIN (for individuals only)”
So it appears what Ramona is saying is accurate. An EIN is valid for individuals as well as businesses. But if I obtain an EIN, do I need a business license to publish on amazon? I’m a Canadian, and I’m just wondering what the procedure is for filing income tax on your royalties from Amazon.
Thanks for any help!
Hi Marco – yes, the EIN info seems to have been confirmed by a lot of people, although I think they’re not the same thing.
I’m afraid I don’t know anything about business licences – or indeed Canadian law! Sorry I can’t help any further with that.
Hi Roz
I just started a blog today, and my very first post is about this! I link to your blog as well. Thanks for the info! It’s much appreciated!
Thanks for dropping by, Adrian – and bon voyage for your new blog!
Reblogged this on James K Slater and commented:
I applied for an EIN over the phone, and it happened in five minutes !
I followed David’s instructions and got my EIN in 5 minutes flat. Spoke to a lovely gal who asked me questions and gave my number there and then. She did ask me if I had filled out an SS-4 but I said “no I don’t need one, I just need the EIN” and she was okay with that.
One thing worth adding that held me up for ages. That phone number needs 00 before it. I was tearing my hair out before I found out I had to add double zero to the front.
Thanks David, you’re my latest hero.
Thanks for adding that, Merita. Very helpful
I am from Australia like Margo (post #82) and I also received my EIN over the phone today. I did have to add 0011 in front of the number to call from Australia, as Merita referenced above.
The operator asked me if I had filled out an SS-4 and I said that I didn’t need it (thank you everyone for this valuable assistance!). She told me to print one out, complete the form with the EIN and then make several copies to keep on hand.
Thank you so very much to Roz and David, your helpful information here is very much appreciated. May all good things come to you Roz!
My pleasure, Kerry. All the best with your writing!
HUGE GRIN ON MY FACE!!!
I followed the incredibly useful advice here (remembered about the relevant time zones) and spoke to a nice chap who was probably slightly bemused by one’s accent… Suffice to say I’ve successfully cut out an unnecessary step (ITiN) to prevent the IRS taking 30%.
thank you
Ah congrats, Brian! Best of luck!
My turn to add a bit as some things have changed!
I rang for an Australian company (but was calling from the UK). On hold for 35 mins, 15 mins answering questions with a VERY slow representative who didn’t even know how to spell Robert and had me go very slowly (he was friendly enough, just VERY slow!).
You now need to press “3” as there is now a specific menu option for “foreign entities requiring an EIN”
So it now looks like (with my added notes):
1. Call the IRS at 1-267-941-1099 (and press 3 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, YOU DON’T NEED TO hang up and start again. Just tell them you were advised you don’t require one for this purpose. They will continue and take all your details manually (instead of by the SS-4).
4. Tell them that you are a sole proprietor (or whatever is applicable). NOTE: You may need to be the “responsible party” if this is on behalf of a PTY LTD or similar limited liability company.
5. Give your details (name, address, etc.)
6. They will ask if this is for compliance with witholding – say yes. OR they may ask “why do you need this?” then tell them for withholding compliance.
7. They will ask if this is for e-books – say yes. In my experience they will ask you what industry/purpose your business is and what you main trading is – here is where you can simply say ebooks or publishing.
8. They will give you your EIN!!! NOTE: AFTER telling you that you will receive forms in 2-3 weeks with details of filing requirements (I sincerely hope this is exempt as it’s enough dealing with the ATO already, let alone the IRS!)
But seriously, it’s pretty easy – got it on first attempt.
Thanks for coming back to add this info, Robert! Still boggling at the idea of an official who had trouble with your name… best of luck with the publishing!
Same here, took 12 minutes over Skype (less than €1 total cost) with the international IRS number. In addition to Robert, I’d like to add to spell everything out for them using an alphabet like the Nato one (or any similar alphabet really) – Like this: http://en.wikipedia.org/wiki/NATO_phonetic_alphabet
It was highly appreciated by the representative on the other side 😉
Thanks for that tip, Roelof – and best of luck with your book!
Thanks Roz and other contributors, you’ve added about a year to the time I have for writing.
Here is what I was told when I called 001-267-941-1099 and pressed 3 on the computerized menu.
‘Sir, do you have an SS4 form?’
‘I’ve been told I don;t require one.’
‘Well I don’t know why people keep saying this to me. How are you supposed to know which questions I’m gonna ask if you don’t have the form?’
‘Can I get it online?’
‘Yes. http://www.irs.gov/pub/irs-pdf/fss4.pdf .’
‘Okay, got it.’
‘All right, I’m gonna call out the line number to you and you give me the answer, okay?’
‘Shoot’ (Well, I wanted to say that, but I just said, “yes, thanks”.)
Ten minutes later I had my EIN number. By line number, she just meant that she could say ‘4a’ rather than ‘what is the first line of your address?’, so I’d advise you to have that web page open to view the SS4 form . . .
Onward, now into W8-BEN country . . . if I’m not back come sunset, send out a search party
Joe McNally
Joe…Sounds too good to be true, but while you are within reach what is W8-BEN?
Hi Philippa, That’s the form you must send to Amazon in Seattle with your EIN number on it. Here’s some more info.
https://kdp.amazon.com/self-publishing/help?topicId=A1VDYJ32T5D3U4
Joe
Hi both! Joe, thanks for leaving your calling card and you beat me to the explanation. And – Philippa – it’s also explained in the post under ‘final step’….
Hello;
I’m in the process of filling the W-7 form to get the ITIN.
Questions (if you could answer, I’d be grateful!):
1) under “h” – other, did you wrote: ” exception 1 (d) royalties”?
2) I cannot find my treaty article number! It’s so confusing! I’m in Portugal. Can you tell me
where it is, please?
Sorry if I’m being a bore. And thank you for the article!
Hi ! To answer your questions…
1) yes, the exception is ‘royalties’ – they’ve changed some of the numbering on the form now, so check which letter belongs next to it, but ‘royalties’ is correct
2 ) ah, that’s a little more complicated. There are new notes on the tax treaty numbers (see ‘UPDATE’ above…) the link to find the one for Portugal should be here… http://www.irs.gov/pub/irs-pdf/p901.pdf
Thank you for your answer.
I might have the treaty number wrong – or not. Could not understand it, for the life of me. Oh well, let’s see how it will go!
They’re not exactly easy are they? Fingers crossed you get the number.
Many thanks for the useful information! I’m a Bulgarian living in Spain. The nearest IRS office is in Paris. Following the advice of so many commenters, I applied for an EIN over the phone. I had to wait for an hour on hold but now I finally have my number! The IRS person was very nice and the process was really simple, apart from few difficulties with the spelling of my Slavic name and my Spanish address. This article saved me months of trouble and uncertainty!
Glad to have helped! Enjoy your extra Euros!
Thanks for this invaluable info! I’m just about to apply for my ITIN. One question I’m hoping you can answer, is this process the same for someone selling physical products in the US, or just eBooks? Thanks
Hi JB – it’s the same process for ebooks and physical books. Best of luck!
Hi Roz,
Great post! Loved learning about how you got through all the paperwork!
I am almost ready to send off my ITIN application on the W-7 form. After reading your post, and comments it seemed much easier to make a simple phone call and get an EIN, so I had to figure out if I qualified for it. Hope this might clarify:
The EIN is for those who qualify for an SSN (U.S. Social Security Number)
Such as those with a Green Card or Visa for the US.
The ITIN is for those who do not qualify for an SSN.
Apparently that includes “resident and non-resident aliens and foreign nationals.”
I’m in New Zealand! Kind of disappointed about the simple phone call idea falling flat! I think that Canada has an arrangement of some sort with the US.
This link was quite handy regarding original, certified, or notarized copies of identification documents. I am hoping to send a notarized copy of my birth certificate since my W-7 form has boxes (a) and (h) ticked for tax treaty benefits!
http://www.irs.gov/Individuals/2013-ITIN-Updated-Procedures-Frequently-Asked-Questions
All the best.
~WilderSoul
Thanks for adding those points, they’re a really useful clarification. Best of luck with your books!
Thanks! You too! 🙂
Where can i get the actual form. Thx
Glenda, I think the various online retailers can supply you with it. So Amazon will ask you to fill in an online questionnaire.