So you have successfully self-published your novel and launched it either on Smashwords or Amazon or both. You do your publicity, your marketing and watch the sales occur to a greater or lesser degree. Months later you receive your first royalty cheque only to discover that the US tax authority (the IRS) has taken 30% despite the fact that Ireland has a double tax treaty with the US which means you should pay 0% on your books sales through Amazon or Smashwords.
You learn that you need to fill in some form and that’s when the fun begins. To fill in the W8-BEN form, you first need to get an ITIN (Individual Tax Identification number). You do a bit of googling and it all looks a bit confusing.
Well fear not. Follow these simple steps and you should successfully acquire that elusive number to complete the W8-BEN and pay 0% on your book sales.
So before proceeding, some caveats: this post is specifically aimed at Irish self-published authors who are selling their books through Amazon and Smashwords. If you are based in another non-US country this post may still be of use but I would highly recommend you check out this blog post by http://www.stepbystepselfpublishing.net/ which was invaluable to me when I was applying for my ITIN.
I also received great advice from Smashwords which you can read here. Personally I was lucky enough to sign up with them first before joining Amazon, who unfortunately are not as helpful or as forthcoming with advice on this issue. I am a self-published author who successfully navigated this process in 2013. I am not an accountant or tax specialist and this information is relevant at the time of writing (May 2014). I also put this in traction whilst I was going through the process of self-publication. The earlier you do this the better.
So with all that out of the way, here’s what you do:
• Complete a W7 form. I did a sample form based on someone who has not lived in the US or had any tax dealings with the US. You can download the sample here. *A word of warning, the IRS are very bureaucratic so fill it in black pen, clear, block writing. Make sure that you put in dates as Month, Day and Year. Put lines or insert N/A in areas that are not relevant and do not fill in the section that relates to office use only. They will send it back if it is incorrect. For more details check out their information page on completing a W7 here.
• Attach a signed letter from Smashwords or Amazon confirming you are an author with them.
Download Amazon letter here.
Download Smashwords letter here.
• Enclose your passport or a certified copy of your passport. You will need to go to the passport office that issued your passport for a certified copy. I know the Dublin passport office is familiar with this process and it cost me €45 for a copy of my passport. They take up to two weeks to issue.
• Post everything to: Internal Revenue Service, ITIN Operation, P.O. Box 149342, Austin, TX 78714-9342, USA, via international registered post. I urge authors to do this because it secures your post and a signature is required so the letter is easily traced if anything goes wrong.
Once you acquire the ITIN number, which takes approximately eight weeks, you can then complete the W8-BEN form.
To complete the W8-BEN form fill in your name in section 1, your address in section 4, your ITIN number in section 6, your PPS or other social security number in section 7, please tick the SSN or ITIN check box. In Part II select a and b and then complete the certification. Remember you are applying as an individual not a corporation or business (select those at your peril). You can download instructions for completing the W8-BEN here.
For Smashwords authors who have completed their W8-BEN form send it to them at:
Attn: Tax Compliance Dept.
PO Box 11817
It takes a few weeks but you will receive notification on your payee information page on your smashwords account.
Amazon authors can complete their W8-BEN form electronically via their account or by post. If sending by post you will need to include your Kindle Direct Publishing Account ID in the top margin of the form to match it to your account and send the signed original version to:
Attn: A/P Tax
PO Box 80683
So that is it until five years’ time. Yes the bad news is that your ITIN number expires after five years so you will need to undergo the whole process again. Still better 30% of your money in your pocket than the tax man.