5 Easy Steps to Avoid the 30% Tax Withholding for Non-US Self Publishers

How-to-remove-amazon-30-tax-withholding

US Tax Law requires that US-based companies like Amazon KDP, Smashwords, iTunes and Createspace, must withhold 30% of any non-US self-publisher’s royalties.

Basically, if you are not an American and you just signed up for a KDP account, Amazon will keep 30% of your revenue for tax reasons.

But losing 30% of your hard earned money is a hard pill to swallow!

Thankfully, you can take 5 easy steps to change it around and reduce that percentage and in some cases, completely remove it.

Which equals more money in the bank.

In this article, you will learn about:

  • Amazon’s tax withhold requirements
  • What is a ITIN and a EIN
  • 5 simple steps to get your own EIN and reduce your losses
  • Percent withholdings based on your location

Since I am a non-US author and have experience with this, Dave has asked me to contribute to his blog and guide you through a really simple, step-by-step Amazon tax information procedure so that you keep more of your hard earned royalties for yourself.

My mini disclaimer- I am neither a lawyer nor a financial planner. For any specific tax questions and how to go about paying taxes on your royalties in your country and similar issues, you will need to consult it with someone like an international tax adviser, an accountant or a lawyer.

EIN versus ITIN

There are really two ways in which you can reduce your Tax withholding. You either get an Individual Tax Identification Number (ITIN) or you get an Employer Identification Number (EIN).

The quick and dirty between the two is that an ITIN takes a LONG time to get and requires lots of steps like filling out forms, paying fees, and visiting U.S. Embassies or consulates.

Luckily for us though, the American IRS views non-US authors as small business owners and therefore allows an EIN to be granted…which you can get from the comforts of your own home and even in your pajamas.

Let’s Get Rid of the Holding: How to Get an EIN

First things first- get your EIN number. You have nothing to lose but a lot to gain. For that, all you need to do is to call IRS and simply ask them for your EIN number.

Step 1: Call IRS: (1) 267 941 1000

You used to be able to fill out an online form, however, in 2014 the form changed and now requires a Social Security number or a ITIN. You can get around this by calling.

My tip: their office hours are 7AM- 10PM US Eastern Time. Check how it translates to your local time and if you want to get it sorted out fast, I suggest you call them early in the morning (their local time) or at the end of their shift. I remember I called them around 1PM my local GMT+ time and I was lucky to get on the phone with one of their agents almost immediately. However, be prepared, it may be a bit of a journey as more and more people are calling. I have talked to some publishers who said they had it more complicated.

Step 2: Provide Basic Information

They will ask you for your name and surname and your address. You will be asked to spell it a few times. You may want to write it down on a piece of paper to have in front of you.

Step 3: Provide a Reason for the Call

They will ask you for a reason for your call. Again, these are the lines you want to use (you may want to jot them down on a piece of paper):

“I need an EIN number to comply with the IRS withholding regulations”

“I am not a US person, I am (your nationality) and I live in (your country of residence)”

“I am not starting an entity in the US”

“I am an individual and I need to fill my tax forms to obey with the US tax regulations. My intention is to publish eBooks on Amazon/work with American companies/ sell info products on Clickbank/ become an Amazon affiliate- add whatever reasons you have”.

The best line is this one:

“ I have recently started my self-publishing account with Amazon.com and I have to comply with the IRS withholding regulations and fill the W8- Ben form”

After you provide this reasons, they will ask you some crazy questions like “Are you going to be operating heavy machinery in the US” and stuff like that. You know what to say, right?

Step 4: Get Your EIN Number

Finally, they will give you your EIN number. Just write it down – you are ready to go.

Man, I love the US. They make things easy and simple. Compared to some bureaucracy we are facing in Europe, this is a paradise. A heaven! They make it so easy for entrepreneurs. Sooner or later, I will end up in the US. OK, back to the main topic…

Step 5: Update your KDP Tax Information

Go to your account and click on the “Tax Information. Then Click on “Complete Tax Information.”

When they ask “Do you have a U.S. TIN?” click yes and fill in your newly acquired EIN.

Then click submit and in about 10 days, you should be good to go.

One thing I need to mention. It will save you frustration. About 1-2 weeks after updating your tax info, KDP will send you a rather depressing e-mail that your tax information did not match the IRS records. You will check hundred times and you will know that they info is correct and you will still get this message (in most cases).

Why?

Well, the IRS needs about a month, or even more than that to actually “properly” register your tax information.

This is why when you get this e-mail from KDP.

So, relax and be patient.

Simply update your tax information and re-submit. After 2 more weeks it should be fine, and your withholding rate will be reduced. Nothing to worry about. Easy peasy!

If you also publish paperbacks with Createspace, use the same EIN number to update your tax information. Createspace will not update it automatically.

I remember I skipped this step, as I believed that since Createspace is an Amazon company, it all updates itself automatically.

But since it does not work that way, you need to make sure you update your tax information accordingly.

What About With ACX

If you want to create an account with ACX.com (to publish audio books), all you need to get is a US address that you can obtain from www.reship.com

You will also need a US bank account that you can get from www.Payoner.com

Once you have gotten that address, just go ahead and start your account.

Use a different e-mail address (not the one you used for KDP or Createspace)
Fill in your tax information using your EIN number + putting all your residency details and your local address.

List of Country Tax Withholding Rate

But once you provide them with that number, what will you royalty withholding tax rate be?

The answer is….it depends.

It depends on where you physically live (not where you are from) and what Tax Treaty that country and the US have in place.

To make it easier for you, I have listed them here:

List of Kinle Countries and Their Tax witholdingsThis list was created using the IRS Publication 515 starting with page 53 and using the “Copyrights” column. You can check that document if your country wasn’t listed here or you want to ensure the tax code hasn’t changed since the publication of this article.

Final tips:

Find someone like a tax strategist or an international lawyer locally, where you live. They will help you with your tax situation.
Important- don’t tell them that you “sell books” on Amazon. It’s Amazon that sells the books! Amazon sells and Amazon pays VAT and all other taxes like that. Tell them that you “receive royalties from Amazon”. Ask them to check your local regulations on royalties.
At some point, you may want to consider starting a company and publishing your books as a company. Especially if you want to scale and wish to deduct some expenses like covers, editors, marketing services from your tax. In many cases, it will be cheaper for you to do it as a company. To learn more about how you can start an LLC in the US, check out Dave’s article here. UK and US has much less bureaucracy than most EU countries and they value entrepreneurship. And…internet just makes it all so easy!

Finally: remember that I am not a professional qualified in international taxes and stuff like that. I simply share some information based on my own research and experience. If you feel lost, consult with a good international lawyer or a tax strategist. But your EIN number is the step number one.

Good luck and may your bank account be happy with more royalties and less taxation! Happy and profitable publishing!

  • In case of KDP it may be even simpler. I filled my Tax Information interview, provided a foreign (so from my country) tax id number, my personal data and consent to submit all these info via digital means. It took me 5 minutes and I’m now eligible for 10% withholding.
    I Poland the tax law is favorable for authors. It’s more benefitial to be an individual than a company.

    • yes, true my brother lived in Poland when he first got started on kindle (now he is a full time digital nomad and he changes countries pretty often) he said the same during the first year when he was only making 1-2 K a month. Some people worry too much about starting a company but they still don’t really have any business. However, when you reach 5K a month or more, and you also have more expenses (marketing, covers, editing) it makes more sense to do it as a company. Otherwise you will pay way too much taxes as an individual (at least here in Spain where I live, but Poland is the same, very few people in Poland make more than $5K a month or more) This will be my next guest blog post if Dave asks me, lol:) Besides, as a company you can write off lots of stuff from your tax so you don’t end up paying that much (UK is a great place to register a company). But if you are only to publishing part-time, you don’t make more than 5K a month, and don’t have any other businesses like we do, then it may be better for you to do it all as an individual. It’s always a good idea to talk to a few international tax attorneys (I love them all!). You can shoot us a message on facebook. We have a few awesome contacts (taxes are now my passion, lol).

    • It all depends on your income really. For me, it’s much more beneficial to operate as a company (I have a UK Ltd. which means 0% withholding in the US). All my friends from PL (or other European countries) who are successful online entrepreneurs also do their businesses (including publishing) as companies not individuals (as an entrepreneur you can choose where to register your company and UK is pretty good). But if you are just starting out, you can do it as an individual. Why not. it’s probably better for small royalty income. But if you are making serious money, sooner or later, you will need to consider registering a company. As an individual you will pay way too much personal income tax and you can’t write off costs that you can as a company (marketing, editors, VA’s and other freelancers, as a company I can even write off traveling, books, courses, seminars…+ the list goes on and on). It’s really important to get it right, most authors overlook it. I always advise people to talk to an accountant/tax attorney. Start as an individual but as soon as you start making money, upgrade to a company (then you will need to call IRS again and ask for a company EIN number). Again, UK Ltd is a fantastic option. Think as an entrepreneur.

  • Gaurav Kohli

    Hi,
    Thanks for this informative step by step post 🙂
    Just wondering, is there a way to receive the already withheld royalties which were calculated at 30%?
    Thanks!

  • Fem-dom Destiny

    This article pulled me down. I wasn’t aware that someone can ask for 30%. That is insane from affiliate marketer perspective. I can see that list above but many countries are missing. Where we can find complete list of countries? thanks

    • As far as I know, that’s it. All others are 30%.

      • mouaad

        Australia: 5%, Austria: 0%, Bangladesh: 10%, Barbados: 5%, Belgium: 0%, Bulgaria: 5%, Canada: 0%, China: 10%, Cyprus: 0%, Czech Republic: 0%, Denmark: 0%, Egypt: 15%, Estonia: 10%, Finland: 0%, France: 0%, Germany: 0%, Greece: 0%, Hungary: 0%, Iceland: 0%, India: 15%, Indonesia: 10%, Ireland: 0%, Israel: 10%, Italy: 0%, Jamaica: 10%, Japan: 0%, Kazakhstan: 10%, South Korea: 10%, Latvia: 10%, Lithuania: 10%, Luxemburg: 0%, Malta: 10%, Mexico: 10%, Morocco: 10%, Netherlands: 0%, New Zealand: 5%, Norway: 0%, Pakistan: 0%, Philippines: 15%, Poland: 10%, Portugal: 10%, Romania: 10%, Russia: 0%, Slovakia: 0%, Slovenia: 5%, South Africa: 0%, Spain: 5%, Sri Lanka: 10%, Sweden: 0%, Switzerland: 0%, Thailand: 5%, Trinidad & Tobago: 0%, Tunisia: 15%, Turkey: 10%, Ukraine: 10%, United Kingdom: 0%, Venezuela: 10%

    • You can always start a UK Ltd or a US LLC and do publishing as a company. I will be adding more info to this article soon and ask Dave to update it:)

      • jocool

        Hi Marta, Really useful article, thanks. Do you have any information about how it works publishing through a UK limited company?

  • Winson

    Hi Marta,

    I transitioned from a single person to a company in Singapore, is the EIN for a new company different from an individual? i haven’t called for any EIN before, but i did receive the 1042-S letters detailing that i’m staying in Malaysia and did complete the tax interview inside kdp. So as a company is it possible to get a new EIN from one of the listed reduced withholding countries?

    when i call to ask for an EIN for my company, do i still answer like the above article, “I am not a US person, I am (your nationality) and I live in (your country of residence)”

  • bardirian

    Hi Marta,
    In your sharing, you mentioned that
    “It depends on where you physically live (not where you are from) and what Tax Treaty that country and the US have in place.”

    I like to know more about this, if I am a Taiwanese, and I am living/working in Thailand as a nomad, do you think I am able to apply from Thailand?

  • beetle tiger

    Hi. Where can I find “IRS Publication 515” to see country wax withholding rate?

  • This is -STILL- an enourmously helpful article. I keep sending it to friends oversees almost daily. Thanks Dave!

    • Awesome to hear Eric! Yeah, saving that much in your income is always important…that’s for sure.

  • Salwa Ib

    Hi,
    Great article by the way, I really appreciate how useful it is. Just to re-affirm you do NOT need to be a citizen if you live in one of the countries within the ‘List of Country Tax Withholding Rate’?.
    Thanks Dave 🙂

  • So, if your country doesn’t have a tax treaty with the US, even if you get EIN, they’ll still keep 30%, right?

    • Yup…

      • Smith Ng

        too bad for me since my country is not on that list, it’s useless to get EIN either way. Is there any other ways for people who are not on that list?

  • Kevin

    I have 2 questions here

    1. I’m from Indonesia, that means if I have EIN number the tax withholding will only be 10%? or 0%?

    2. Is there any other way beside making a call directly to get my EIN? By email or such perhaps?

    Thx

  • Dish1111

    I have received my EIN today on phone. Should I wait for 2-3 weeks before updating my EIN in amazon tax interview, or can i do so right away? Please help.

  • Maria McMahon

    This is indeed useful and accurate – I’d already found out how to get an EIN and that went really well, but now, as mentioned above, I got the message saying that my information doesn’t match the IRS records. When I try now to update the info and put my EIN in, it’s saying I can’t do this if I list myself as an individual, and of course that is the only option that is relevant to me. In fact, trying to figure out what the others actually mean is a bit like going deep down the rabbit hole… my plan now is to call them again at a time when the estimated wait isn’t 30-60 minutes as it was just now when I tried to see if I can get this sorted!

  • Maria McMahon

    Oh, here’s the message I got: Based on your prior inputs, an ITIN or SSN would be expected, but you have provided an EIN. Generally, EINs are issued to businesses and organizations. Your prior input for Type of Beneficial Owner is an Individual and not a business or organization. You can either provide the ITIN or SSN of the individual who is the beneficial owner, or if the beneficial owner of the income is a business or organization, please update your previous inputs.

  • Mike Ferson

    Hey Marta, I am from Macedonia, even if I get the EIN and insert into my tax interview, I will still be charged with 30% tax right? Because Macedonia is non-treaty with US. Any idea how can I reduce the tax?
    Thank you.

  • Γιαννης Αντωνοπουλος

    Hi, thanks for your guide. I have a question. When I get my EIN as foreigner does the treaty “works” by itself, or I have to make fill an extra form every year in order IRS do not with hold 30%? I want to accept payments through stripe. Thanks

  • gotten my number and everything validated but the Tax treaty

    is excluded in my country (NIGERIA), so i will continue to pay the 30% tax

    very bad but is there any way to remove it further?

  • Daud Hamadi

    I cant call the number for IRS from ireland ((001 267 941 1000) for some reason. Can anyone help please.

  • Sven R

    Couldn’t I register an LTD in UK and use that for Amazon? To save 30 % (if i am not in one of the listed counries?)

  • Nick Vasey

    So, it looks like the EIN is NO LONGER functional for an individual. I had previously (successfully) registered as an Australian for tax purposes and had my withholding rate reduced to 5%. Logging back into Amazon recently however, I saw that it had changed back to 30% (I received no notification, no nothing – it just flipped back to 30%). I went through the rigmarole of trying to re-register my details, and it seems the EIN is no longer useable. This is the error message I got.

    “Based on your prior inputs, an ITIN or SSN would be expected, but you have provided an EIN. Generally, EINs are issued to businesses and organizations. Your prior input for Type of Beneficial Owner is an Individual and not a business or organization. You can either provide the ITIN or SSN of the individual who is the beneficial owner, or if the beneficial owner of the income is a business or organization, please update your previous inputs.”

    This is the current state of play. Does anyone have any relevant updates in light of this sad money-grubbing fact? 🙁

    • Do you have any updates regarding the issue that you raised ? Is the EIN number Working ? Or is it useless to undergo the process of Calling them & requesting an EIN # ?

    • @nickvasey:disqus : Did you find some Solution to this ? I have now gotten the EIN number but I am an individual & the tax form gives me the option of entering ITIN # only . What did you do ?

  • I am a Nigerian and the 30% seem much to me.
    do you know if there is anyway to reduce it?

  • Thank you, Marta! It worked, they gave me a EIN number. The problem is, the KDP Tax Information asks me for Type of beneficial owner (Corporation, Disregarded Entity, etc.). I don’t know what to select. I don’t see anything that fits a one-man business. What type of business should I select?

    • Hi , Did they Give it you on Phone call ? What did they ask you ? Please share a little bit –

    • @bentodeespinosa:disqus : Did you find any solution ?

    • Georgi Ivanov

      Hello Bento,

      Did you find the answer for this?

      George

  • @marta_tuchowska:disqus @StawickiMichal:disqus : Nearly all of us struggling with the Problem that , we have received an an EIN # ; but having registered as an Individual , we are being given the ONLY Option of entering the ITIN # . Neglecting this if we enter the EIN # then we receive an Email saying :

    Based on your prior inputs, an ITIN or SSN would be expected, but you have provided an EIN. Generally, EINs are issued to businesses and organizations. Your prior input for Type of Beneficial Owner is an Individual and not a business or organization. You can either provide the ITIN or SSN of the individual who is the beneficial owner, or if the beneficial owner of the income is a business or organization, please update your previous inputs.”

    : Any Solution to this ?

  • Rakshith Nani

    what is this 30% tax are they recieve tax from our books profit if 100dollars then they are going to take 30 dollars from the books which has sold is it right………
    its not that we have to pay right…..
    reply pls