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Permlink Replies: 10 - Pages: 1 - Last Post: Jan 4, 2018 4:43 AM Last Post By: Notjohn Threads: [ Previous | Next ]
Basma

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Registered: 12/20/17
Why tax withholding!
Posted: Dec 20, 2017 8:27 AM
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Hello,

I'm not a US citizen or connected in anyway whatsoever with the US. But in the W-8Ben it says on top
"Based on the information you provided, your Royalty payments will be subject to 30% U.S. withholding tax once your taxpayer identification form has been processed and validated. " I don't have a US TIN or anything related to the US. So why the 30% tax?!

Edited by: Basma on Dec 20, 2017 8:30 AM
Notjohn

Posts: 23,720
Registered: 02/27/13
Re: Why tax withholding!
Posted: Dec 20, 2017 8:34 AM   in response to: Basma in response to: Basma
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So why the 30% tax?!

Because your country has not negotiated a favorable tax treaty with the US. Many countries have. If withholding bothers you, you might consider moving to one of them.

(Don't trust KDP to publish a print edition. Don't trust CreateSpace to publish an ebook. Each does one thing well and the other thing poorly.)

Good luck! -- NJ

Notjohn's Guide to E-Book & Print Formatting

The blog:
http://notjohnkdp.blogspot.com
Emily Veinglory

Posts: 3,570
Registered: 04/25/13
Re: Why tax withholding!
Posted: Dec 20, 2017 10:24 AM   in response to: Basma in response to: Basma
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If you are in a country that has a tax treaty with the US, enter your tax identification number.
Basma

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Registered: 12/20/17
Re: Why tax withholding!
Posted: Dec 21, 2017 12:16 AM   in response to: Emily Veinglory in response to: Emily Veinglory
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I don't have a TIN.
Alberto Garcia-...

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Re: Why tax withholding!
Posted: Dec 21, 2017 1:15 AM   in response to: Basma in response to: Basma
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Basma,

You are not a US citizen. But, as you sell your books through amazon.com, you are "working" for an American company. That company pays their own taxes in the US. And you generate profit for them in the US, and get paid for it, from US. Amazon must declare how much they make with your books (and pay taxes on that), and also how much they pay you (again, as a worker for a US-based company).

So, believe it or not (and want it or not), YOU pay taxes in the US. Even if you are not a citizen, even if you were never there.

In the W8-BEN, you have the option to indicate your country's tax identification number (then, you also have to indicate which country). If your country has some treaty with USA, the withholding can be reduced (typically donw to 5 - 10%, even 0% in some cases such as Germany). Then, you declare whatever taxes you pay in the USA in your local tax declaration, so you avoid double taxation.

Cheers,

AlbertoG
http://libros.agbdesign.es/libros-propios
Ralph E Vaughan

Posts: 3,425
Registered: 12/01/12
Re: Why tax withholding!
Posted: Dec 21, 2017 7:51 AM   in response to: Alberto Garcia-... in response to: Alberto Garcia-...
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Alberto Garcia-Briz wrote:
Basma,

You are not a US citizen. But, as you sell your books through amazon.com, you are "working" for an American company. That company pays their own taxes in the US. And you generate profit for them in the US, and get paid for it, from US. Amazon must declare how much they make with your books (and pay taxes on that), and also how much they pay you (again, as a worker for a US-based company).

Absolutely incorrect. You are not an Amazon employee. You do not work for Amazon in any way, shape or form. Taxes are are your personal responsibility. Taxes deducted from foreign nationals have everything to do tax treaties between countries and zero to do with Amazon's own tax liabilities. If you do not know anything about tax or employment law (I worked in the field a quarter-century) you shouldn't be advising others. In the Terms and Conditions, it is plainly stated that writers using the KDP platform are not employees, contractors or agents and that claiming to be could result in termination of their account.

So, believe it or not (and want it or not), YOU pay taxes in the US. Even if you are not a citizen, even if you were never there.

In the W8-BEN, you have the option to indicate your country's tax identification number (then, you also have to indicate which country). If your country has some treaty with USA, the withholding can be reduced (typically donw to 5 - 10%, even 0% in some cases such as Germany). Then, you declare whatever taxes you pay in the USA in your local tax declaration, so you avoid double taxation.

Cheers,

AlbertoG
http://libros.agbdeign.es/libros-propios

Emily Veinglory

Posts: 3,570
Registered: 04/25/13
Re: Why tax withholding!
Posted: Dec 21, 2017 8:29 AM   in response to: Basma in response to: Basma
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If you are an adult you either have or can get a tax number from/for your country (the one you use when you pay tax there). If your country has a tax treaty with the US, Amazon will accept that number.
Notjohn

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Re: Why tax withholding!
Posted: Dec 21, 2017 9:59 AM   in response to: Basma in response to: Basma
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I don't have a TIN.

Then get one, because you can't publish without one. You need a tax ID, a bank account, and an address, all of them in good working order.

(Don't trust KDP to publish a print edition. Don't trust CreateSpace to publish an ebook. Each does one thing well and the other thing poorly.)

Good luck! -- NJ

Notjohn's Guide to E-Book & Print Formatting

The blog:
http://notjohnkdp.blogspot.com
Lana Allen

Posts: 1
Registered: 10/01/13
Re: Why tax withholding!
Posted: Jan 3, 2018 12:56 PM   in response to: Ralph E Vaughan in response to: Ralph E Vaughan
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Could you please tell me why the EIN for individuals / sole proprietors is no longer accepted on the W8-BCEN form for Canadians in 2018 - it only accepts your foreign tax number now - the Canadian 'SIN' (social insurance number).
Thank you.
Donna St Felix

Posts: 6,054
Registered: 09/18/13
Re: Why tax withholding!
Posted: Jan 3, 2018 1:37 PM   in response to: Lana Allen in response to: Lana Allen
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Lana Allen wrote:
Could you please tell me why the EIN for individuals / sole proprietors is no longer accepted on the W8-BCEN form for Canadians in 2018 - it only accepts your foreign tax number now - the Canadian 'SIN' (social insurance number).

Because governments dictate what is acceptable for tax purposes.
Notjohn

Posts: 23,720
Registered: 02/27/13
Re: Why tax withholding!
Posted: Jan 4, 2018 4:43 AM   in response to: Lana Allen in response to: Lana Allen
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The (US) Internal Revenue Service used to issue an EIN as a courtesy to foreign publishers, even though that was never the purpose. (It's an EMPLOYER Identification Number, which we self-pubbers in the US are supposed to get if we pay sub-contractors $600 a year or more, so we can issue them a 1099-MISC with a copy to that selfsame IRS.) More paperwork followed because of varying tax treaties around the world.

The IRS stopped doing that several years ago when the number of self-pubbers was no longer in the hundreds but the millions, with tens of thousands of them what the IRS sweetly calls "non US persons." Instead, Amazon developed software that uses your home-country tax ID number to figure out what if any withholding should be applied to your account, depending on whether or not there's a tax treaty between the two countries, and what level of withholding has been negotiated between them.

By publishing on Amazon.com, you have in effect set up a virtual presence in the United States, selling books to all comers. So you are subject to taxation by the US, though in most cases there is none.

(Don't trust KDP to publish a print edition. Don't trust CreateSpace to publish an ebook. Each does one thing well and the other thing poorly.)

Good luck! -- NJ

Notjohn's Guide to E-Book & Print Formatting (2018 edition)

The blog: https://notjohnkdp.blogspot.com
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