Self Publishing Authors UK and US Tax Withholding
Are you a self publishing author based in the UK, selling your books in the US?
Royalties from your US book sales will be subject to a 30% tax withholding.
Tax Withholding Exemption
The good news is that self publishing authors based in the UK can turn the 30% into a withholding rate of 0% (due to a UK/US treaty), which means that:
- you can claim full tax withholding exemption
- when you declare the foreign income on your UK tax return
- and pay any tax due on it in the UK
Before Reading On… Here’s My Information Disclaimer
Website Designs Chester does not offer legal, financial or accounting advice. I/We are not lawyers or accountants. Please ensure that you undertake your own due diligence. If you need one, I can highly recommend my Accountant in Chester Shaw Austin.
How To Save That 30% Tax Withholding On Your US Book Sales!
It really is very simple, although there is a great deal of misinformation ‘out there’ about what you need to do, to make this 30% saving.
Having done this myself – I’m happy to share with you this very simple process
Before you get started, this process relates to you if you are classed as a business [person], rather than an individual [person]! If you’re not sure, check with your accountant, if you have one.
Having said that, a lot of confusion arises from this individual -v- business ‘entity’ issue. All I’ll say, is :
‘as a self-publishing author, you can be an ‘individual’ and the publisher and owner of your own ‘business’ & if you’re receiving revenues through international book sales then you’ll have notified the Inland Revenue [about your ‘business’] and be offsetting your [business related] costs & expenses – right?’
What You Need and How To Get It!
YOU’LL NEED :
- a phone
- an EIN (Employer Identification Number)
- IRS Form W-8BEN
STEPS TO TAKE :
- Call IRS tel : 00 1-267-941-1099 (international tax dept) – (call charges – see notes below)
- Select computerised menu option #1 … (eg: you are located outside US)
- When you get to speak to a human being, ask them to please issue you with an EIN number.
- If necessary, explain that you’re a UK author wanting to stop 30% tax withholding on book sales – I was passed over to a ‘specialist’.
- They’ll ask for your name, address, telephone number.
- They’ll ask what type of ‘business entity’ you are : ‘sole-proprietor’, ‘company’ etc and trading name & address (if different from your own name).
- They’ll ask a few other IRS ‘standard’ questions.
- Tah Dah! They’ll issue and confirm your EIN number (write it down) and send to your address within 2 weeks, and you don’t have to wait until it arrives to use it.
That’s It – You Now Have Your Active EIN Tax ID
Your EIN is immediately active and can be used to complete your W-8BEN form for sending to your book publisher/s, if required to do so.
Complete the form, see example below, with the information you provided to IRS and the EIN they gave you.
- EG: Amazon will ask you to post or email your completed and signed W-8BEN to them.
- Enter your EIN when applying to sell books via iBookstore. If you are prompted to complete U.S. tax forms on iTunes Connect, you must use the same U.S. Tax ID.
- Others : Ask your publisher/s what they require.
Resources & Additional Notes
If you’ve been doing any research you may have already read, or been told, that self publishing authors need other types of US ID (TIN) or that you need to complete a SS-4 form… or other/s – You Don’t!
Telephone Numbers: I’ve listed the IRS tel : 00 1-267-941-1099 (international tax dept) for you, so you can reach the right department. That number is NOT toll free, so your phone provider will charge you for the call. Once I’d actually got that number, all went quickly and didn’t cost a lot at all.
I did try the toll free number : 00 1-800-829-1040 first, which entailed a lengthy wait, confusing automated message handling (press 1 for… goodness knows what, press 2 for .. something else, press 3… etc!). When I did get through, an advisor gave me totally wrong information.
Personally, I recommend ringing the direct number, they deal with many self publishing authors, and the service was quick and easy.
If you wish to save some pennies use a free international call service (search online for a provider).
EDIT: Thanks to Andrew, see comments below: Amazon have the W8-BEN submission details listed on their site here : “Amazon KDP Non-US Requirements“. Remember to “Write your KDP Publisher Code in the top margin of the form”!