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.
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.
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.
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!
The rules have recently been updated, and WilderSoul was kind enough to send me this link of FAQs, including the requirements for support documentation.
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