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Friday, 30 August 2013

US Tax Terrors!

If you have ebooks published on Kindle, you may have received the following email and been struck by foreboding chills concerning form-filling and migraines.

"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
  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. 
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.


  1. Not at all sure how this applies to us. We are writers, not publishers. And, in any event, surely it's the vendor that's taxed, i.e. Amazon, and not the purchaser, i.e. us? We buy from Amazon but we don't sell to them.

    1. Technically we are writers AND publishers, earning income from sales via Amazon, a US company. Currently Amazon is withholding 30% of our earnings and giving them to the US Government. If we go through the hassle of getting a tax number and identify ourselves to the US government as living in NZ, then the withholding is only 10%.

      This demand for tax numbers is for writers selling through Amazon, not book buyers purchasing from Amazon, which, as you say, wouldn't involve taxation issues.

      I'm wondering where the demand is coming from - the IRS or Amazon themselves?

  2. I wonder how Amazon is going to sort out which of our books are sold to Americans and which are sold overseas. If we get a royalty check we will need a breakdown as the IRS cannot expect us to pay tax on books sold elsewhere in the world. Seems to me they have just created a rod for their own backs.

  3. An update on the tax interview situation with Kindle - it's not as bad as I feared. You can complete the interview without a US tax number and all will be well. It isn't too hard - the only tricky bit is right at the end when they ask for a signature - just hit 'continue' and it will give you the option to sign electronically and submit your W8-BEN. Then life can continue as before! Without a tax number you'll still be charged 30% withholding tax, so if your sales soar, then would be the time to go through the number-seeking process.