Thursday, May 1, 2014

How to get exempt of US tax withholding without ITIN! (Get an EIN)

So here is how I finally, and very simply, got exempt from the 30% tax withholding for non-US residents on Createspace and Amazon Kindle Direct Publishing without getting an ITIN.
(With many thanks to the writer of the blog-post: Non-US Self-Publisher? Tax Issues Don’t Need to be Taxing).

For those looking for help with getting an ITIN number: you probably don't need one. An EIN number is a lot easier to obtain, and is sufficient for self-publishing on Amazon and Createspace.

Step 1: Apply for an EIN

First, I filled in an SS4 form. Find the latest version and instructions here: Form SS-4, Application for Employer Identification Number (EIN). You just need it filled in to have it before you when you call the IRS, you won't need to send it off.

Mine looked like this:

Then, I phoned the USA IRS service to apply for an EIN. I found their phone number on the IRS site on the page: How to Apply for an EIN, under the heading "Apply by Telephone – International Applicants". (If calling from outside the US, add 001 before the telephone number).
Be sure to have pen and paper handy, and your filled-in SS4 form before you.

After about 5 minutes of waiting, I got a very friendly lady on the other side of the line who asked me some simple questions. Having the SS4 form before me, these where easily answered. A lot of spelling was involved, but a few minutes later she gave me my EIN number, in the form 12-3456789.

Easy as that.

Step 2: fill in and send off W8-BEN forms

1) Amazon KDP

Amazon KDP gives you the possibility to fill in your W8-BEN online. Just sign in to Amazon KDP, click on "Yourname's Account" (top right), scroll down to "Tax information" and click on "Update Tax Information". You will be guided through the process and at the end you will be notified that your tax withholding rate is now 0%. Hurray for Amazon KDP and yourself!

(General information for Amazon KDP here: go to Amazon KDP Help, and in the menu on the left look for the heading "Managing your sales" ->Tax Information requirements.)

2) Createspace

Createspace has not yet entered the future (or the present) of online W8-BEN form filing and requires you to print it out, fill it in by hand, sign it (in ink!, no photocopies) and actually physically send it off.
Mine (for Belgium) looked like this:
(I blackened out the personal parts of course).
Just to be complete: I don't know if this matters, but just before sending it off and after scanning this, I added "(Copyrights)" after the word "Other" in line 10, as in the tax treaty tables (see below) the column in question states "Copyrights".

For line 10, you may have to adapt some data to your own country
  • For the number of the article (12 in my case) you'll have to click on the link to your country in this IRS tax treat country list, then click on "Income tax treaty", and in this treaty (the PDF that opens) find the article number for "Royalties". So for Belgium, that's 12, as you can see in the table of articles of the treaty.
  • for the tax withholding percentage (0% in my case), you'll have to open IRS publication 515: Withholding of Tax on Nonresident Aliens and Foreign Entities, go to the section "Tax Treaty Tables" (almost at the end), look for the tables that say "Royalties" on top and find your country's tax withholding percentage for Royalties - Copyrights. In my case, on page 40, right column for Belgium: 0%.
Now you'll have to send the form to Createspace, with or without a cover letter stating that you join the W8-BEN form for compliance with tax withholding, and that's it. Don't forget to mention your Createspace ID (you can find it on your Createspace Member Dashboard) on the top margin of your form, they won't process it without it. 
You'll find the Createspace address to send your form to on their Tax Information page (to find this page manually, go to Createspace Help -> Topic "My Account" -> "Tax Information").

About a month after sending off my W8-BEN to Createspace I contacted their support team myself asking an update on my tax status. They sent me another email-address to send my question to, which I did, and from which I received the following reply a few days later: 
"I can confirm that your account, member ID# XXXXXX, we received your W-8 form and it was processed, lowering your withholding to 0%."

Good luck and happy self-publishing!

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1 comment:

  1. Thanks Bart for sharing this helpful information. Jonathan