Being an Amazon affiliate is one thing, publishing your own books on Amazon is another, especially if you are not living or working out of the US. As a non-US publisher, Amazon have to retain 30% of your royalties for the IRS.
You can read Tax Information for Non-US Publishers on the Amazon site if you like, but I’ll summarize what it says below:
- US tax law requires Amazon to report income made by Non-US publishers from royalties on books to the IRS. They are also required to withhold 30% tax. You still have to pay taxes in your own country.
- If your country has a tax treaty with the US (see page 36-37 of this document for details of treaties) you can submit a W8-BEN form and may then be eligible for a lower rate of tax withholding.
- To register as a non-US publisher you need to apply for a tax identification number (TIN) which is written onto the W8-BEN form before you send it to Amazon.
- Amazon also mention that you need to complete an SS-4 form.
What I have learned about this process
Disclaimer: I am not a tax accountant in any country, let alone the US. This is not tax advice, it’s just personal opinion based on my research.
From reading on Kindle Publishing forums, I have been told that you do not need a TIN which can take weeks to receive. Instead you can get an Employer Identification Number (EIN) and use that on your W8-BEN instead.
The good news is that you can get the EIN over the phone. I got mine yesterday. I was on hold for around 20 minutes and then once connected to a representative, the process took in less than 10 minutes.
I got my EIN over the phone, and a physical copy will arrive in 4-6 weeks via mail.
I am now going to fill in my W8-BEN with the EIN and send it off to Amazon. I’ll update this page on what happens.
If you are a non-US publisher and want to avoid paying 30% tax before even paying tax in your own country, then you need to send Amazon your completed W8-BEN with a TIN or EIN.
Luckily, I found an excellent article on obtaining the EIN. I just followed that to get mine. You can read the article “Non.US Self-Publisher? Tax Issues Don’t Need to be Taxing” by David Gaughran for the process and more details. I recommend you read all of the comments as well. One of the comments points out that when the computerized system picks up your call, they ask you to punch in a number depending which department you want. David’s article says you press number 2, but that has changed. It’s now number 3.