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Dealing with amazon.com and the IRS - Authors!!
I had to fill the w8 form when I joined an American translation agency Geoff! Didn't have to do the w7 one at all, but then it's better to fill an extra form than delays when a necessary form hasn't been filled :)
Isn't the W7 form for providers and W8 for the company deducting?
Wouldn't the W7 form be for people registering for tax and therefore getting a tax identification number, and the w8 for withholding and therefore receive funds for which tax has not been deducted as it is to be deducted in your home country?
My understanding is that someone like you or Sophie fills in a W-8BEN form to submit to Amazon to prove you are a citizen or resident of a country that has a tax treaty with the USA. This would then stop them deducting tax in the USA and make you eligible to pay tax in the UK.
Sounds right to me :)Paperwork is such a pain !! Hate it hate it hate it!
Geoff, I just get a cheque from Amazon.com (as discussed before, re paying it in) I'm not a US taxpayer. Haven't filled in any forms. And they haven't taken off any tax.
Wow. I had no idea it was so complicated.
LOL, now that's interesting Karen. I wonder if that's policy or a mistake?It's tax Rosen. As soon as you mention those three letters you can hear the accountants rubbing their hands together with glee.
You'd have thought the government would make taxes easy, after all, they are making money out of them.
I started a thread about this a couple of weeks ago but didn't receive a response! ;-(Anyway, all the writers I know have had to fill in a W7 form and send their passport or copy to the Embassy.
I also saw that these forms have to be forwarded to Amazon by the end of the calendar year! So we've missed it for this year. We won't get the tax back from the Zon. We'll have to get the tax back via an accountant I'm presuming! Extra headache! ;-(
Karen my first cheque didn't have the tax taken out but the subsequent ones have been missing 30%. I'm owed over $4000 dollars now! I have to go to the notaire tomorrow to get yet another form verified as the American Embassy lost my other copy! It's taken me 3 months to try and sort this out so far, I'm not a happy bunny!
message 14:
by
Geoff (G. Robbins) (merda constat variat altitudo)
(last edited Jan 02, 2012 12:46PM)
(new)
Bloody hell Mel, that's a big hole in your income stream. Like all governments they are quick to take and slow to return.
It will get really complicated then cos I'm listed as a publishing firm rather than an individual!
I'm not sure, I think it's just another tick in the box. But then everything seems simple upon first inspection.
I know Geoff, It's pretty tough to take at the moment! ;-(Seems as though I'm working 14 hours a day for nothing... oh that's right, I am! ;-)
Quick update my notaire was unable to sign the apostille that's obligatory with the W-7 form and now I have to take a 2 hour trip to Caen to get my passport certified! Is it all worth it? Really not sure anymore! ;-(
Good grief. Nothing is ever easy. :(
Well, I've filled in the W7 form and they are asking for proof of identification. Unfortunately, Sophie doesn't have any of the ones they are asking for. She has a driving licence, but only provisional. Does that mean she can't get her tax back until she has passed her test?Tried to phone the Embassy in London. Advised by a machine that they are too busy and just keep phoning back till you get someone (at 6p a time, mind you) or phone Philadephia. Cheese anyone?
So, if we cannot get through before Friday, we will phone Philly Friday night when it is free to call the US.
Great fun. Not.
Don't think I'll bother!!I will run it by our accountants tho, because of the reciprocal tax arrangements - maybe we can get a rebate against our uk tax if we've been overpaying on the us tax? just a (probably vain) hope
I spoke to a French accountant last year and he said we don't have to fill in any forms as France has a treaty with the US. I told Amazon this they said no form no money! They've got us by the short and curlies!
Mel (Lorne's creator, Pete's murderer) wrote: "I spoke to a French accountant last year and he said we don't have to fill in any forms as France has a treaty with the US. I told Amazon this they said no form no money! They've got us by the short and curlies!..."
10-1 you'll end up filling in or signing the forms in the end Karen. Sorry. Having said that, they are only single page forms and once you have the answers they are pretty straightforward, you just need to know what their terms mean. Bit like computing really.
of course if they're only taking off 30% tax and one were in the higher tax bracket...just checked on the NI rates too... in the UK we pay 12 per cent, on top of the basic 20 per cent income tax - slightly different calcs if it's self employment, but it still adds up to about the same - wherever the money comes from, they'll want their cut.
Geoff is correct.
All people in a country with a tax treaty with the US should fill in the W8BEN form to register a US ITIN and claim back the 30% witholding tax (for each company you get royalties from).
The problem is that the W7 must be filled in first to get your ITIN from the US IRS. The notary is required to validate your passport or any other document (fuel bill, etc) that verifies your residence in the country with the tax treaty. Passport is easiest. The notary adds a postile that is recognised internationally. Once this is done you can send it to the US Embassy or to the IRS in Austin:
Internal Revenue Service
ITIN Operation
P.O. Box 149342
Austin, TX 78714-9342
You send the W8BEN (with your ITIN when you get it back from the IRS) to Amazon or whoever needs it.
I can go through it in detail but it is a bit long-winded. I think I did cover this in another thread somewhere.
David
All people in a country with a tax treaty with the US should fill in the W8BEN form to register a US ITIN and claim back the 30% witholding tax (for each company you get royalties from).
The problem is that the W7 must be filled in first to get your ITIN from the US IRS. The notary is required to validate your passport or any other document (fuel bill, etc) that verifies your residence in the country with the tax treaty. Passport is easiest. The notary adds a postile that is recognised internationally. Once this is done you can send it to the US Embassy or to the IRS in Austin:
Internal Revenue Service
ITIN Operation
P.O. Box 149342
Austin, TX 78714-9342
You send the W8BEN (with your ITIN when you get it back from the IRS) to Amazon or whoever needs it.
I can go through it in detail but it is a bit long-winded. I think I did cover this in another thread somewhere.
David
Thanks David, it's good to know I'm on the right track.
If you are publishing your book through your own UK limited company which only has 1 (one) shareholder, below are the instructions for filling out the SS4 to obtain your EIN, and then instructions for filling out the W-8BEN (Disclaimer - Information contained in this post is provided without liability for information purposes only and is subject to change. You should always check with the appropriate tax authorities.):As you are the only shareholder of the company, fill out the forms as follows:
Form SS4 (I have attached a blank form and a form with the entries you need to make).
The following sections should be completed:
1 Company name
4a & 4b Company Address
7a Name of the sole shareholder
8a Yes
8b 1 (one)
9b Under Foreign Country – United Kingdom
10 Tick Other and type: Foreign entity needing an EIN to complete a form W-8BEN and avoid withholding tax
18 No
Name of sole shareholder above signature line, and applicants telephone and fax numbers to the right of that.
Sign and date the form.
It is best to be beside a fax machine and ring the IRS in Philadelphia to get the quickest results.
Telephone the IRS on (00)1-267-941-1099 (I found the best time to be between 22:00 to 01:00 UK time)
Tell them you have a foreign entity needing an EIN to complete a form W-8BEN and avoid withholding tax, and that you have the completed SS4 which you would like to fax to them. They will give you a fax number to send it to (this is one (00)1-267-941-1040, but they may give you another), and either ask you to wait on the phone while they check it and issue you with an EIN there and then (also ask them to fax you the EIN, and they will automatically send you a copy in the post), or they may say fax the document and ring them back in 10 minutes. Either way, you should now have an EIN number, and you are ready to complete the W-8BEN (one for each of the US companies that are paying your publishing company royalties) and send it to Amazon, Smashwords etc.
Form W-8BEN
• Note, the Amazon help page says the form should be completed in wet ink (Please send us a physical (wet ink) W-8BEN form to the address below. Please use the W-8BEN with affidavit. This affidavit will allow us to refund any withholding deducted earlier within the current calendar year in the event that we do not receive a valid form prior to your first payment). (https://kdp.amazon.com/self-publishin...). The one I submitted and which was accepted was completed on the computer and printed, so I suppose that counts as wet ink.
• At the very top right of the form for Amazon, type: Amazon KDP Publisher Code: (and insert the code, which can be found by logging in to your Amazon KDP account; click Account at the top right, which should take you to your company/publisher information page, and if you scroll to the bottom right, your publisher code is there – mine is a 14 alphanumeric code).
• For the Smashwords form, at the very top right type: Smashwords.
• 1. Insert company name.
• 2. United Kingdom
• 3. Tick Corporation
• 4. Insert company address
• 6. Insert the EIN number and tick EIN
• 7. If you have your UK Corporation Tax (CT) Code insert it (a 10 digit code usually preceded by another 3 digits, so 13 in all. It is usually found on letters sent to you by HMRC once you register the company with them, which you are required to do within 3 months of starting to trade). If you do not have the CT code, then leave blank.
• 8. For Amazon leave blank. For Smashwords, insert your Smashwords screen name or email address.
• 9. Tick a, b and c. Type United Kingdom in the space next to (a).
• The sole shareholder/director should sign and date the form, and type “Director” in the space where it says Capacity in which acting, if they are a director, if not, then type “Beneficial Owner”. Also sign and date the affidavit section so that you can get a refund of tax that has already been withheld in the current year.
• Post to: Amazon Digital Services, Attn: Vendor Maintenance, PO Box 80683, Seattle, WA 98108-0683
• Some have advised to post the form to Amazon with tracking, but I just sent it by ordinary recorded delivery, and about 2 weeks later I received email confirmation that the form had been received and was complete.
• Post to: Smashwords, Inc. Attention Tax Compliance Dept. 15951 Los Gatos Blvd., Ste 16, Los Gatos, CA 95032
• The top of your Smashwords payee page (Account>Account Management>Edit Update Payee Information) should show something similar to this (Your W-8 tax form was received on 2011-07-09, and your withholding is currently set at 0%) after about 3 weeks. If not, email them and ask if they have received it.
It doesn't concern me but I can't help but think we are very lucky in having some awesomely helpful people like George among our members :)
Some of you may be weeping for Barak Obama and eager to help him narrow the US fiscal deficit by paying taxes in the US which you do not need to. If so, you are in the company—although I presume not the unfathomable income bracket—of other great humanitarians such as Warren Buffett, who would also like to pay more taxes. If you do not follow the W-8BEN route which I have explained in my post above, then there are two other options, both of which can be more costly:1. You can have your accountant complete a US tax return each year, for which s/he will charge you a handsome sum, and claim a refund of the US tax which has been withheld. This if you don’t mind getting 30% of your income a year or more later than you need to. OR
2. You can claim double tax relief against your UK tax liability on the same profits by claiming a deduction of the US withholding tax. But this is unlikely to result in all the US tax withheld being relived against your UK tax liability, because the withholding tax is likely to be higher than the UK tax on the same profits, and any excess of US withholding tax cannot be carried forward, but is lost. E.g. US withholding tax is 30%, UK corporation tax 20% (for profits below £300,000 2011 tax year). The UK tax will also be lower because you are allowed to deduct allowable expenses before it is calculated, whilst the US tax withheld is based on income before any deductions.
Well George, thanks very much for that. It's going to be great help to the larger sellers here.Linda phone Philadelphia tonight. A bored person at the other end of the line couldn't tell us what ID to use and we had to tell her what forms we think we should use, she didn't have a clue. This was after 45 minutes in the queue. Good job we made this call on a Friday evening when most international calls we make are free for up to an hour. We hung up at 58 minutes. Good to see that civil servants are a world wide breed though. Apologies to all civil servants in the audience. Perhaps it's confined to the Income Tax branch.
The problem we have is that Sophie has no full drivers licence, no passport, no utility bills. We are going to send the provisional drivers licence and her birth certificate and hope for the best. Nothing else we can do.
I'll let you know how it goes.
Sophie needs a passport, Geoff. She can't come and visit me in Niaja without one!
Geoff, there are a number of smaller sellers and startups that publish through a Ltd company. Check the rules for applying for an EIN by completing the form ss4, as I can see no reason why an individual self-trading cannot apply for one based on the instructions shown on the third page of the form. You may need a UK tax code for the self-trader.
Thanks for all that, George - I'll try and get my head round it later. I am a 'sole trader' hence trading under the name of the imprint rather than my own name (not limited company, that's far too much hassle) so I think that's my route to go. Fortunately they haven't withheld any tax so far this financial year anyway, but who knows what will happen next year.... and thanks Geoff for flagging this up - it's been a v useful thread.
I do feel sorry for those of you who have to deal with the US tax system - the UK one is a minefield at times.
...and accounting/bookkeeping for my Other Half's business is my main occupation, and I hate it!! Just done the VAT returns and now have the company year end accs to do... but it's our bread & butter. Or Gred and Gutter as I say it thru gritted teeth. :)
Karen wrote: "...and accounting/bookkeeping for my Other Half's business is my main occupation, and I hate it!! Just done the VAT returns and now have the company year end accs to do... but it's our bread & butt..."Yup, that's Linda's job too. I must admit that there is no way I could do what I do without her contribution to the business.
Just for info... if you are self employed and reaching state pension age, you will continue paying Class 4 N.I. (12.8%) as well as your 20% income tax, until the start of the tax year AFTER you reach state pension age. Unlike everyone else who stops paying as soon as you reach SPA. There, bet that's cheered you up. More tax, yippee.
Now, why doesn't that surprise me?
Think I'll start a campaign!The Guardian said they'd put my 'moan' in the Your Shout section of the weekend's Money.
Good on yer Karen. I look forward to seeing the linkies.
Can I just confirm, it's only US royalties that are affected by this tax? UK royalties are fine to collect without paperwork?
message 42:
by
Geoff (G. Robbins) (merda constat variat altitudo)
(last edited Feb 09, 2012 03:24PM)
(new)
That's quite correct Rosen, but you need to keep note of the payment in case you reach the point where you need to start paying tax.We have finally got somewhere. We have ended up using a Notary (Thanks for the clue Mel, when you mentioned Notaire.) to register Sophie's drivers licence and birth certificate. I posted it off today to Austin Texas. At least this way we don't have to send the original documents (The birth certificate was a copy from the registrar). £50 for the notary, £30 each for the two documents, £10 to send fully tracked to the US.
Once we have the US tax reference we can then send the second form off to Amazon and a couple of other places that sell her book.
Could be worth it, as she is selling more copies in the US than the UK at the moment. If not, she'll recoup it over time with her further book sales.
I'll add a new post once I have more information.
Wow! It's going to cost me money to get paid? Great.
Good luck, Geoff. They received my copy on Jan 11th but I've still not received my ITIN!!! And Yes, Rosen, it costs us to get our money back. My gripe is that US authors get paid from the UK by EFT, we have to have a cheque (costs me 36 euros per month) AND the US authors DON'T get tax stopped! Hardly fair and reeks of discrimination to me! ;-(
The United States of America - a democracy at home, a dictatorship abroad.
Because it comes in dollars, Rosen, I have to deposit into my French account! ;-)
And they say the banks don't rob us.
Mel, have you considered opening a bank account with a US bank? I was thinking you can then transfer it to your french account. Surely, that has to be a cheaper option?
If anyone else has had experiences they would like to share they would be much appreciated. In the meantime here are some links I've found so far.
First is a link to a W-8BEN I now have. W-8BEN
Instructions for the W-8BEN form. W-8BEN Instructions
This is a link to the W7 form. Not sure if UK residents need this. W7
Instructions for the W7. W7 Instructions
Link to the IRS office at the US London Embassy US Embassy
Finally, the guidance used by companies like Amazon from the IRS. W8 Instructions