Tax And Book Royalty Hurdles For Non-US Authors

If you are not a US author, self-publishing has some impediments to jump before you can receive your book royalties in full. You certainly need to check the Amazon tax information for non-US authors.

International self-publishing requires overcoming several financial, legal, and logistical obstacles before you can expect to make money from ebook and book sales.

For authors who are new to or considering self-publishing for the first time, there are important issues you need to consider. There are some traps to avoid and extra international obstacles to overcome.

To avoid frustration and wasting your time and money, here are some of the major points that you should consider and understand before self-publishing from outside the US.

Can You Self-Publish Everywhere?

Not all self-publishing platforms allow international authors to use their services. For example, Nook Press, the self-publishing platform of US-based Barnes & Noble, restricts access to only a few countries. This is from its website.

NOOK Press is currently for authors and publishers in the following countries: US, UK, France, Italy, Germany, Spain, The Netherlands, and Belgium.

The vast majority of self-publishing companies are US-based platforms. Some offer very limited, or indeed, no access at all to international authors. Before considering a platform, check this basic point of availability in the fine print before you do anything else.

Withholding Tax For Authors

Withholding tax is undoubtedly the biggest trap for non-US self-publishers.

To avoid having between 30% and 50% of your book royalty-based income deducted due to international tax laws and agreements with the US, you will need to obtain a US Taxpayer Identification Number (TIN).

You also need to live in a country that has a tax treaty with the US. In some cases, you can use your local business identifier number if you are registered for one in your country.

There is a lot of information regarding this topic in the account sections of popular self-publishing sites. But they all make it sound like a difficult process.

From bitter experience, I can tell you that the first time I tried, it became a paper nightmare. I sent off my application to the IRS in the US, only to have it come back rejected.

There are so many regulations regarding what constitutes a valid ID. There are also translation and language difficulties in different countries. It can be a very hit-or-miss affair, and you can waste a lot of time.

Solutions

Luckily, however, some years ago, when I tried again, I read a post by Merita King, a UK author.

She found an easier way to get a TIN.

She simply called the IRS and asked for it. I did the same and had my TIN in five minutes.

Unfortunately, Amazon, Smashwords, and other sites do not give you such simple advice regarding tax information for non-US authors and publishers.

Perhaps they are not permitted to do so by US law. But it proves that asking for advice from others is often far more rewarding.

Google Search and social media are valuable resources in getting the information you need for this and many other issues that you will have to confront.

Update On International Tax Identification Numbers

If you live in a country with a tax treaty with the United States, you may be able to use your local tax identification number (TIN).

It is much easier than applying for an EIN or TIN with the IRS.

You can find the list of qualifying countries in this list from the IRS.

If you qualify, you can use your local TIN to complete your tax information for Amazon KDP.

You can find this note in this KDP support article.

If you do not have a U.S. TIN, you may enter the income tax identification number issued to you by the tax authority in your country of residence.

You can find out more about completing your tax interview for KDP by reading this support article regarding Amazon tax information for non-US publishers.

How Will You Get Paid For Your Book Sales?

This is where the wheels can really fall off your dreams of making money from self-publishing.

There are so many restrictions, limits, and methods of payment.

The payment terms of book royalties differ enormously from one service provider to another.

Just because you sell some books doesn’t necessarily mean you will get paid.

Smashwords and Draft2Digital are by far the fairest in this regard. Smashwords pays your royalties quarterly, directly into your PayPal account, for all sales accrued during that period.

Draft2Digital pays monthly on balances over $10.00. Both are simple and easy to understand. As they are aggregators, it is for all sales made through all the sales channels they service.

Kindle Direct Publishing divides sales royalties into each one of twelve individual stores: Amazon.com, Amazon.co.uk, Amazon.de, Amazon.fr, Amazon.es, Amazon.it, Amazon.co.jp, Amazon.in, Amazon.ca, Amazon.com.br, Amazon.com.mx, and Amazon.com.au.

For each of these stores, you need to accrue US$100 in sales income (or the equivalent in the currency of the individual store, e.g., Euro100) to be eligible for your royalty payment by check from each individual store.

For some countries, however, it is possible to have your payments made electronically into your bank account.

This negates the $100 limit. So, even small amounts of a few dollars will go into your account each month.

If you live in a country that is not eligible for electronic payment from KDP, however, you could be waiting years and years to accumulate enough sales from, say, Amazon.fr to reach Euro100. This is, in my mind, very unfair.

The only way around this problem is to remove your ebooks from all Kindle stores other than the US and then hope that your ebook buyers can access the US Kindle store.

Publishing Print On Demand Paperbacks

If you are thinking about publishing in paperback, you may believe that it is an inexpensive way to produce your book and have hard copies available for you to sell either locally or online.

On average, it will cost you between US$2.50 and US$4.00 per copy from a provider such as KDP, Lulu, or Blurb.

However, when you place your order, you will immediately see that the shipping cost for your books is equal to or above your cost per copy.

This does not take into account possible customs duties levied by your country that you may have to pay upon delivery.

This can mean that your books might cost you upwards of US$12-14 per copy by the time they get to you. On top of this, delivery times can be up to two months if you use the most economical postage rate.

Conclusion

There are many self-publishing platforms and service providers. I have only covered a few key points and the three major publishing companies in this article.

But before you jump into self-publishing, do your research first. Look for the answers to these key questions before deciding on which publishing option is best for you.

Questions for non-US self-publishing authors.

Am I eligible to publish?

Will I have withholding tax deducted from my book royalties?

Do I understand the Amazon tax information for non-US authors and publishers?

Will I have to pay local income tax and bank fees?

Do I need a Tax Identification Number or EIN?

How, when, and how often will I receive my royalty payments?

Should I publish ebooks only?

Should I publish in paperback POD?

As with any new business venture, do your homework and research first.

Ask questions of people online and make sure you read the Terms and Conditions of each service provider carefully before you click the publish button.

Related Reading: Self-Publishing Without Amazon KDP – Can You Do It?