If you’ve tried self-publishing a book on Amazon Kindle Direct Publishing as a non-U.S. person (i.e. not a U.S. citizen, resident, or business with direct connections to the U.S.), then you may have experienced the 30% withholding tax levied on your U.S. royalty payments.
As required by U.S. tax laws, Amazon will, by default, deduct the full 30% tax from royalties earned on your Kindle book sales.
The problem with this is that you end up paying taxes twice: U.S. taxes of 30% and taxes in your own country. Talk about double taxation!
If the country you are a resident of (for tax purposes) has a tax treaty with the U.S., I will show you how to reduce the tax withheld in the U.S. or pay nothing at all.
How To Avoid or Reduce the 30% Withholding Tax For Non-U.S. Self-Publishers
In the past, to avoid paying or to reduce the withholding tax, individual publishers either had to obtain a U.S. Individual Tax Identification Number (ITIN) or an Employee Identification Number (EIN).
After providing one of these identification numbers in your tax information, the tax withheld will depend on the tax treaty between your country of residence and the U.S.
Non-U.S. publishers preferred the EIN route by calling the U.S. Internal Revenue Service and requesting their EIN. After answering a few questions and receiving the number, they update their tax information (on the W-8BEN form) and voila, they can now keep more of their earnings!
The other alternative, ITIN, is a notoriously difficult process involving lots of paperwork, fees, and potentially several months to get it sorted out. I have heard of people who spent 6 months to a year to get their ITIN!
Bad News: The EIN appears to no longer be an option on Amazon Kindle for non-U.S. individuals or sole proprietors. The options available to you now are a U.S. TIN (i.e. social insurance number or ITIN) or a foreign (non-U.S. income tax identification number).
So this is where it gets interesting!
As per Amazon:
If you are a non-U.S. publisher interested in claiming tax treaty benefits to reduce your withholding, you will have to provide a tax identification number (TIN). If you have a U.S. TIN (ITIN for individuals, EIN for non-individuals), you must provide it. If you do not have a U.S. TIN and the tax authority in your country of residence issues an income tax identification number, you may enter it to claim treaty benefits.
Amazon
As a self-publisher, you actually no longer need to go through the hassle of obtaining an ITIN, or waste your time calling to request the EIN…you can now simply enter your tax identification number from your own country!
Easier, don’t you think?
So, if you are a Canadian resident, you can use your Social Insurance Number (SIN).
Other examples of identification numbers that are applicable include United Kingdom residents (National Insurance (NI) number), Australia (Tax File Number), Finland (Personal Identity Code – HETU), Netherlands (Citizen’s Service Number – BSN), France (INSEE code), etc.
Completing Amazon’s Tax Information Interview – Step by Step
Step 1: Choose Individual/Sole Proprietorship, and “No” if you’re a non-U.S. person.
Step 2: Complete the information at the top of page 2 of the form (name and address, etc.) and for the Tax Identification number section, choose the “foreign (non-U.S.) income tax identification number option.
Step 3: Enter your foreign income tax identification number (SIN for Canadian residents, NI for UK residents, and so on).
Step 4: Review your tax information on the W-8BEN form for accuracy. As you can see, my royalty payments will now be subject to 0.0% U.S. withholding tax!
Step 5: Consent to electronic delivery of form 1042-S and electronic signature.
Step 6: Woo-hoo! Your tax interview is completed.
Final Thoughts
In my opinion, the ability to use a foreign tax identification number significantly simplifies the process of reducing or avoiding the U.S. 30% withholding tax.
Your eventual “savings” will depend on the terms of the tax treaty between your country of residence and the U.S.
If you can register, as shown above, the tax withholding rates on your royalty payments based on where you live will be:
Australia: 5%; Austria: 0%; Bangladesh: 10%; Belgium: 0%; Canada: 0%; China: 10%; Denmark: 0%; Finland: 0%; France: 0%; Germany: 0%; Jamaica: 10%; Mexico: 10%; Netherlands: 0%; New Zealand: 5%; Pakistan: 0%; Philippines: 15%; Poland: 10%; Russia: 0%; South Africa: 0%; Sweden: 0%; Tunisia: 15%; Turkey: 10%; United Kingdom: 0%.
You can also confirm what withholding rate applies to your country of residence via the IRS’ Tax Treaty publication 901.
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If you have any questions, please feel free to drop them in the comments section below.
@Steve: Yes, this is a big time and money saver as otherwise you would have the 30% withholding taxes applied to all your royalties while still having to pay taxes to the government in your place of residence.
Interesting! If I ever self-publish (someone I saw on Twitter self publishes romance novels or maybe it was one step above romance, and makes a KILLING.. but they are American). I will refer to your information here, thanks Enoch!
@GYM: Yes, I have also come across some individuals who are really killing it by self-publishing on Amazon Kindle. Maybe I’ll one day be able to put my thoughts together and write a blockbuster as well 😉 Good to know you may find this info useful at some point.
There needs to be a better method than one’s SIN (Canadian). Pardon me for saying so but entering the single most sacred piece of ID into a web form at a retail company is a TERRIBLE idea. Think about how hard it is for them to protect credit card numbers… and they want me to put in the key to my formal federal identity?!? That’s nuts. It is like putting your identity on sale on ebay!
@Samantha: You have a legitimate point! I know that I was worried about that as well when I was setting up my account. However, I don’t know of any other alternatives for waiving the taxes if you don’t give them your SIN. They must have some serious privacy protection in place, however, we all know what happened with Equifax recently…
Hi Enoch, has there been an update as to a better way to complete the tax interview for KDP, other than offer your SIN #? That is the only section that I have not yet completed. It has held me up for months.
@Lisa: I am not aware of an alternate way apart from adding your SIN.
I wonder why the EIN is no longer an option? As author/self-publisher I AM my own business unit, so to say, or entrepreneur, self-employed, and I AM claiming that my income is connected to a US business (Amazon), am I not? What happens if an EIN is input? In my case, I am living in a country that has no tax treaty with the US, and au bout does not have a postal system. Amazon would not directly deposit into my bank account here, and royalty checks would not arrive. So I was thinking of publishing with Amazon/Createspace from my home country, Germany, only that there I do not own a TIN since my usual residency is not there. I pay taxes is the country I live, but what I earn here per year is about equal to 3 months salary in Germany and I would not have to pay taxes anyway. Any thoughts about how to get around that or what would be repercussions for my plans to publish on Amazon?
If someone in the above-mentioned gives me his TIN number, can I use it? Thank you.
@Ntare: I think the TIN is supposed to match with the name/identity of the seller.
Hi Enoch,
what happen if I’m French and and sell ebook only (or for the most part) on amazon.fr ?
Will I get also a 30% tax ?
Thanks
@Paul: Good question. I am not sure how that would work…probably not for sales on the .fr site since it will be considered local to you (and you will be expected to pay your taxes as per usual), but can’t say for sure.
Hi Enoch,
Thank you for the information. Do you know the procedure for a business? I will use a corporation and the interview is asking to identify which limitation on benefits we are claiming. Do you know which one applies to amazon?
Thank you,
Kris
@Kris: Sorry I don’t know the answer to your question. I use my name as a sole proprietor.
Did you figure this out? I am in the same boat
Thank very much for this precious information.
But I have a question related to Kdp ,too.
What is the year-end tax forms for Kindle Direct Publishing authors? Are these paper or paperless forms and what someone should complete in them? And after completing (filling out) them, what is the following step?
@George: Your KDP royalties will be documented in your normal tax return (income and expenses). I don’t believe there are any particular forms that KDP authors have to specifically fill out.
Sir.
Thanks for your great knowledge, kindly guide me, am new struggling to make it in life after school no work in Nigeria, and want publish my 1st ebook as self publishers with Amazon/other ebook stores, but I don’t register nor have tax ID, can I use my national ID number to fill in my Amazon tax form, so that my book be accepted for marketing.
PLEASE HELP
Dennise
@Denise: Yes, you should use your national ID number. However, I’m not sure whether the U.S. has a tax treaty with Nigeria. If they don’t, there may be a 30% tax withholding on income generated.
Hi there.
This page is filled with good info. Keep up the good work. I will be a regular here.
Valuable and timely information. I was just about to start filling out intimidating IRS forms to apply for an ITIN when I discovered this article. Now I can start publishing right away instead of waiting. Thanks so much!
Hi, This is great information. Thank you. I am a Canadian citizen with a SIN number and a Canadian savings account. But I’ve lived in Malaysia for decades, and so have withdrawn my residency status in Canada and don’t pay taxes there.
Can I still use Canada as my payment location and avoid withholding tax?
I have a tax number in Malaysia where I pay my regular income tax. But amazon does not support electronic payment in Malaysia, so my Malaysian account is not a good option for me.
I do have a tax number in Singpore as I pay withholding tax there when I work there. And I have a singapore bank account.
Could you please help urgently! Which bank should I use for KDP? Many thanks!!!!
@Marianna: I think you will have to go with Malaysia as that is where you are a “resident for tax purposes.”
Yep, that’s what I’ve done then. Thanks Enoch. Your page was a real eye-opener. Very good. Thanks!
You are welcome! 🙂
Enoch, regarding my last comment just now, The KDP form you refer to says “Provide the Tax ID issued to you by your country of tax residency”. so my country to tax residency is Malaysia – not Canada. I think I’m caught vbetween a rock and a hard place.
Canada – have citezenship, bank acct, SIN number – don’t pay tax there now
Malaysia – have bank acct, tax number – this is my country of tax residency
Singapore – have bank acct, tax number (only pay withholding tax there)
Any suggestions?
@Marianna: Sorry I am responding late and I hope you were able to sort this out? Your situation is a bit tricky. If the income you are expecting is not too high (under the annual non-taxable personal rate in Canada), I would probably just use Canada to make things easy. Alternatively, maybe this same logic could apply to Singapore?
This actually helped, and it was over so fast. I only wish I came across this article earlier. Thank you so much. 🙂
@Sushi: You are welcome!
Hello Mr. Enoch Omololu,
Please I’m about to publish my book in Amazon and I saw tax information that I will pay 30% withholding tax of the royalty, as I’m not a US resident and my country doesn’t have a tax treaty with the US government.
What can I do to get exception or tax reduction, as I’m paying tax in my country too.
Please I need your help.
Thanks!
@Abdulhameed: I am not sure if there’s an option to avoid the withholding taxes if your country does not have a tax treaty with the US. The US government is unable to get their slice of the pie even though you pay income taxes in your own country.
Great post, thank you.
I have just changed this information and it now say’s that I am exempt from paying the 30% tax being a Canadian resident.
Do you know how one would go about claiming the previous paid taxes back?
Thank you
Download your 1042S from KDP, then file a T1 adjustment with CRA for the year in question. Call an accountant if you don’t understand what I said.
Great article. A few comments from aCanadian tax preparer turned KDP self-publisher.
First, the title of this article makes it sound like tax evasion, when really all this does is guides the reader through setting up tax stuff on KDP. While wording the title as instructions for getting out of taxes may bring more readers, it may invite unwanted attention from tax authorities. Just a thought.
Second, this article is correct in that if you are a non-us publisher using KDP you can just use your country’s tax identification number in Amazon. Even before this, if you paid the us 30% witholding, all you had to do was claim that amount you already paid as a Foreign Tax Credit on your country’s tax return to get your money back, so all Amazon did here was simplify the process. Since 1980 the IRS has had tax treaties with many countries to avoid double taxation and Amazon has not changed that, they just simplified the process by filing the W-8BEN for you.
Third, I highly recommend that even if you are exempt from the 30% witholding tax due to a treaty, that you have your tax returns professionally prepared by someone familiar with us tax law. You may still have to file a 1040 and 8833 and not doing so carries a penalty of $1,000. I am not the person to ask, nor is the author of this article. Please have your taxes prepared by a professional, especially when the IRS is involved.
Thanks for the Info. I had done this before but needed to refresh my memory on how to do this, since it’s time to renew my old W8. Thanks again.
@Ten: You are welcome!
Enoch, I am a us citizen living in Canada. I have a Canadian SIN and an American TIN. Will I have to pay taxes in both countries?
@Nathaniel: I am not sure how that works. I would assume it cancels out due to the US-Can tax treaty?
https://www.swanwealthcoaching.com/knowledge-centre/us-citizens-living-in-canada
Is this information just for Amazon? I’m looking at a self publishing aggregator that sells on multiple platforms, so I would love to know if this is available across the board
@Jamie: I only use Amazon, so I can’t say for sure if this applies to other platforms.
Hi, Enoch! If my country doesn’t have tax treaty with the US, can I still avoid the 30% withholding tax?
@Roth: Unfortunately, I don’t know of any workarounds to avoid the 30% withholding tax if you reside in a country without a tax treaty with the US.
How can someone who is not a US resident fill the address requested when filling information on amazon
@Mike: I believe Amazon’s tax form allows you to enter your address from outside the U.S.
Thank you SO MUCH. I’ve never been great with taxes already and that aspect of KDP just boggled my mind.
@Tina: You are welcome!
How secure do you think this is? I mean a SIN number is like one of the most important pieces of ID we have… are there any other alternatives?
Hello,
My Government restricts citizens from giving out tax numbers to third parties, what should I do in an instance like this?
I’m a Nigerian publisher, Nigeria doesn’t have as tax treaty with US, so will my nigerian TAX ID function?
@Emmanuel: You will be able to use it to register, however, the withholding tax will automatically apply since there’s no tax treaty.
I am Canadian and have a company with an NEQ # it is a sole proprietorship could I not use this instead of my SIN?
HI Enoch,
Thank you for helping self publishers going through the tax review process. Do you know if the tax review process for a small publisher is the same or different?
Mei
@Mei: I think they are the same based on my experience. Cheers.
Hi Enoch,
Thanks it was really useful. I followed the steps. in the end, they add a new step!
I mean after I insert the SIN, and choose the country (Canada) Amazon asked me:
“Do you derive the income for which you are claiming treaty benefits?” If I answer “NO” Amazon show this message: “You do not appear to be eligible for the treaty benefits.”
But if I answer “Yes” then Amazon ask about “Limitation on Benefits (LOB)”
which has some option to choose from. You have to choose an option. Which I don’t understand any of them. Could you please advise me which option is the correct option for Corporation in Canada?
Thanks again,
Pejman
Hi Enoch. My name is yonathan I’m refugee living in Uganda. Now want to publish a book on Amazon KDP. When I try to get account they ask me a tin number. Is it your information work for me?. Thanks.
@Yonathan: I think it may come in handy. That said, Uganda does not appear to have a tax treaty with the U.S., so you may not be able to stop the tax withholding. I assume you can use your foreign income tax identification number e.g. a national residency card number or something similar. All the best!
Hi Enoch, Thank you so much for sharing great information. I am an Indian Citizen but now a permanent resident in Canada. when I fill out tax forms for KDP, what should I select for country of citizenship as it says
“If you are an individual, enter your country of citizenship. If you are a dual citizen, enter the country where you are both a citizen and a resident at the time you complete this form. If you are not a resident in any country in which you have citizenship, enter the country where you were most recently a resident”.
I am confused that should I select Canada or India as I want to use Canadian SIN.
@Ashish: Tricky, but I would use Canada to simplify things.
Hello sir
I’m into kdp but from Nigeria. Can i input my Nigerian TIN inplace of the U.S ITIN??
@Omolayo: I believe so. That said, I suspect you won’t be able to avoid the tax withholding as I don’t see an applicable tax treaty between Nigeria and the U.S. unfortunately.
Thanks for this, it’s been an interesting read.
I’m a Canadian and also hesitate to provide my SIN (similar to a comment above). Can I not provide my SIN and just accept amazon giving the IRS 30%? Is that an option?
Great post Enoch.
Since I open my company in Estonia Amazon started to apply 10% withholding. Is there any way to avoid it or… get this 10% back later on?
@Kevin: Not if Estonia lacks a tax treaty with the U.S.
Hi Mr. Omololu,
Thank you for the information. I was wondering if you had any insight as to how one could go through the same process, as a corporation? For example, I can use my corporate business number as the TIN (from what I can tell, it works), however, I’m then asked if I will derive the income from which I am claiming tax treaty benefits, which I assume is a Yes, and then I have to select from the limitation of benefits, but have no idea which one applies to a corporation within Canada. Do you have any knowledge or advice in this regard?
Thank you for your time.
Regards,
J. Mac
@JMac: It’s been a while since I did this, but I think the process is the same. That is, you just use your corporation number and complete the other details as yourself.