"In order for Amazon to comply with U.S. tax reporting regulations, it is required that all KDP publishers provide valid taxpayer identification. Our records are showing we haven’t received valid tax information for your account yet. To ensure you may continue selling on Amazon, please complete your tax information by 10/25/2013.
A new online method is available to submit your tax information by taking a short tax interview. Please follow the instructions below to submit your tax information:
1. Sign into your KDP Account at http://kdp.amazon.com
2. Click on the “Complete Tax Information” button at the top of your Bookshelf.
3. Be sure to enter accurate information and avoid typos in Name(s) or Tax ID numbers.
The tax interview will guide you through a step-by-step process to determine which tax form is right for you and gather all required details to update your account. Once the tax interview is complete, you can follow the status of your submission on your KDP Account page under “Tax Information”.
To do the interview you'll need a US Tax number. There is some disagreement over exactly which US Tax number you will require and how best to get them. I've been researching the problem and have found a helpful post from a British writer, who says that phoning the US to obtain an EIN number is the most effective solution. Here's the link to her blog post which has numerous comments from people who have followed the process and added their experiences. http://catherineryanhoward.com/2012/02/24/non-us-self-publisher-tax-issues-dont-need-to-be-taxing/
It seems that if you are direct about saying you are simply selling ebooks through Amazon from outside the US, you should be given a number within 7-10 minutes. No need to fill out massive forms and post your precious passport to the US to verify your status!
I'll give this a go when I can find the courage, and let you know how I get on! It's got to be better than going to the accredited NZUS Tax company in Auckland for help and forking out $400 for a consultation!
Once you have your EIN you can fill in form W8BEN for Kindle, Smashwords and Createspace so that your earnings are only taxed at 10% instead of 30%. (I think.) And Kindle won't close your account!
Ah, if it was easy, everyone would be doing it, eh? Wish me luck.