Friday, 20 April 2012

ITINs and not paying US tax to the IRS

Unless a British author applies to the IRS for the right paperwork, Amazon will retain 30% tax on all US book sales. Everything I'd heard about applying for an ITIN (individual taxpayer identification number) stressed how difficult, nay impossible, the process was. I'd read so many 'helpful' horror stories that I kept putting it off.

This February, my sales with a KDP Select Remix promotion were such that Amazon was going to withhold about $2,000 in US tax. This galvanized me into action, and I visited the American Embassy in London on 22nd February. I took with me:
I took lots of other stuff too - a blue pen, printouts of my sales, my Citibank dollar chequebook, a UK tax letter, two paperbacks in case of queues, but needed none of them. After going through various checkpoints, a nice chap copied my passport, stamped it, my letter and form, and told me I should receive a certificate in due course, which could be several months. When I had it, I was to send it with Form W-8BEN to Amazon. The whole thing took twenty minutes.

My ITIN arrived in the post from America on the 26th March, and I posted the W-8BEN to Amazon. And yesterday I received an email from Amazon (I'd emailed to ask if it had arrived) saying: The form arrived recently and it was just recorded for your account. Your withholding rate is now set to 0%.

And that was it. David Gaughran describes how to get an EIN instead of an ITIN over the phone here - but the word is you need persistence - they may put you on hold for half an hour or cut you off.


  1. Well done you!! I like that you came prepared with two books to read in case of long queues!

    Now if only Amazon will sort out their UK corporate taxes! LOL! Take care

  2. Some poor public servant somewhere is probably being hauled over the coals right now for making it too easy :)

    I wonder, does something similar apply with Canadian authors? I'd vaguely heard about things like this before (firmly filed in the "for when I get around to it" category) but heard that you need to set up a company before Amazon would stop withholding tax.

  3. Kitty, the experience was interesting as well as quick, with the various stages you had to move through. I passed a soldier with a machine gun, and thought it very American - then when I went for tea at the House of Lords recently, there were two soldiers with guns... A sign of the times.

    Bot, take a look at this thread on Kindleboards about Canadians and ITINs: It sounds as though the system and requirements are the same.

  4. Hi Lexi,
    Followed you over from Phoenix's house.
    Were you able to get info on the horse/Queen matter we were chatting about?

    No need to like my story/query, I just hope you were able to get some inkling of the part she played.

    I'm of British/Scottish heritage and I portray her role in a very good way.

    Thanks, it was wonderful you took me task.


  5. Hi Wilkins, no, I could find nothing. Clearly Her Majesty has got away totally with her nefarious behaviour re the racehorse - until your novel comes out, of course :o)

    Let's just hope she doesn't get David Cameron to send an MI5 spec op after you...

  6. I'm sure it mattered that you were well-prepared!

    I'm guessing you have to pay UK income tax on earnings. Sorting that out seems pretty daunting to me! (One reason I'm glad I'm on PAYE and not self-employed!)

  7. Yes, alas, I have to give the Government what it regards as its share.

    Being self-employed, it just means I have to fill in an extra section on the online self assessment form - and I must say, the Inland Revenue website is a model of clarity compared to the IRS's.

  8. A few years ago, I was signed up by a New York agency. One thing required of me, even in advance of finding a publisher, was an ITIN.

    The amount of work I had to do before the agent was ready to submit was horrendous -- more, I think, than most people would believe. The ITIN was in fact the least of my problems, but it was still a major hassle. It involved several international phone calls, and SENDING MY PASSPORT TO THE STATES. (A notarised copy would have sufficed, but the cost was prohibitive, so I took a chance.)

    As far as I could tell, this was, at the time, the only way to do it. Your experience suggests that the system has been streamlined.

    Never did find a publisher over there...

  9. Iain, your experience of the publishing industry sounds quite like going through a threshing machine or WW1.

    Did you annoy them in some way? Is your name at the top of an industry black list?

  10. $2000! No wonder that NY agency wanted a piece of you! Hope the sales continue to grow.

  11. February was a rather good month :o)

    At the moment, I'm keeping all pieces of me in one place.

  12. My pleasure, Rosen. Someone on a forum recently said you now need to make an appointment at the US Embassy - I've looked on their website and it doesn't say that, so I don't know if it's true, but it might be worth checking before you go.