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Taxes for non-US Self-Publishers

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Tax-Deductions
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Nothing in the world is so certain as death and taxes.  Even if it is not tax time, let’s talk about taxes: Self-publishing an e-book on the biggest online retailer in the world is very easy, but it does not mean you can ignore the taxes.  IRS rules mean that tax monies for your revenues withheld will only be available for refund through the IRS and not refunded automatically by KDP and CreateSpace, as they have been up in the past.  Amazon will remind you… They will send you a form to fill out.  If not, here is the way to go:

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Amazon and other retailers are required by law to withhold 30% of the royalties earned by non-US authors until they settle their tax status.
The commonly accepted method was going through the laborious process of getting an International Tax Identification Number (ITIN), which requires form-filling, notarized copies of passports, embassy trips, fees, and inexplicable rejection.  Self-publishers might be able to get an Employer Identification Number (EIN) instead, which will also do the trick.
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Applies Only to Independent Authors:
Are you publishing through their own company outside the US? Also the IRS doesn’t appear to ask for proof that you have actually established your own publishing company, there are all sorts of reasons why you shouldn’t commence this process until you actually have.

  • Call the IRS (tax authorities) at 1-267-941-1099
  • This is a direct line to the dedicated unit in Philadelphia that deals with foreign entities (you) who need an EIN.
    Explain them you are applying for an EIN for a foreign entity.
  • Tell them you are a sole proprietor, and the owner of the business.
  • They will ask for your name, mailing address, phone number, the name of your company, and the country it was incorporated. This will involve a lot of spelling and repetition, but make sure all the details are correct.
  • You will be asked if this is for compliance with withholding taxes and if it is for e-books.
  • After confirming all your details, you will receive your EIN (Employer Identification Number) right away. Write your EIN down on paper and also save it on your computer.
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Submitting the W8-BEN
If you follow these steps, you will save yourself time, money, and a whole load of heartache. All you have left to do is fill out the W8-BEN form. Download the W8-BEN form from the IRS’ website, and print it out.

IMPORTANT:
You will need one copy each for Amazon KDP, CreateSpace etc and/or other retailers.
Don’t abbreviate your country, write it out in full

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Part I (fill out everything in blue ink)

  • Your full legal name.
  • The country you live in/pay taxes.
  • Type of beneficial owner: Check the box that says Individual (unless you are an LLP for example).
  • Your physical address / street address.
  • Your mailing address.
  • Select the EIN box, and fill your number in
  • Your foreign tax number (i.e. your tax number in your country of residence
  • Fill in your KDP Publisher No. (in Account Settings, bottom right)

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Part II

  • Write your country in the line provided
  • Tick the box and fill in your EIN.
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Skip Part III

At the final section – explain the reasons – write “beneficial owner is a resident of (fill in your country)”
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Part IV

  • Sign your name, date it, and write Self at Capacity.
  • Send the original! W8-BEN – not a photocopy! – to every company, that sells your book or that you have published with
  • Add a simple cover letter stating you attach the W8-BEN for compliance with withholding. It takes them a few weeks to process, but within a month or so, they should stop withholding your royalties.

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Conclusion:
Don’t delay to apply for an EIN. It means only a phone call to get an EIN. Best way to do this is before you launch your book. Once you have done it, you will feel relieved – and you will receive 30% more book revenue from your online retailer.

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More info:  http://www.irs.gov/
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online
http://www.irs.gov/Businesses/International-Businesses/U.S.-Withholding-Agent-Frequently-Asked-Question

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Tagged: deduct taxes, EIN, how to become a publisher, Income tax, IRS form, IRS.org, practical tips to set up your own publishing company, Publishing business, save tax


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