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Now that UK and overseas authors can sell their Kindle ebooks via Amazon.co.uk as well as Amazon.com we've been checking up on royalty payments and the US tax situation.
Previously payments were made to all overseas authors via US$ cheques. This is still the case with ebooks sold on .com. You'll have to pay a UK bank charge for paying the cheque in. RBS, for example, charges £7.50 per transaction. Amazon have recently changed their criteria on issuing royalty cheques and now no payment is made until at least $100 is owed. On request (see Smashwords FAQ link below), Smashwords will withhold payments until your US tax number comes through.
Royalties due on ebooks sold on Amazon.co.uk are paid in UK £ cheques and mailed monthly. You have to accrue at least £75 worth of royalties before a cheque is issued. Most ebook sales (at Feb 2011) are still made to the US who are 12 - 18 months ahead of Europe in adopting ebook reading.
If you haven't registered for exemption, Amazon will withhold 30% of all sales made on .com for US tax. To stop this, first apply for a US IRS Individual Taxpaper Identification Number (ITIN) by filling out form W-7: Get here.
Embassy instructions for UK residents are here. UPDATE: Before jumping through all the hoops, try asking for an EIN (Employer Identification Number) which they may issue you with over the 'phone.
When you have accrued at least $10 sales on Smashwords, you can apply for a signed covering letter from them to produce with your documents. Details here.
You need to provide proof of identity. "Either a valid passport (original or a notarized or certified copy); or at least two or more identity documents that are current. One must include a recent photograph. In addition to a passport, examples of acceptable documentation include: national identification card (showing photo, name, current address, date of birth and expiration date); civil birth certificate; foreign driver's license; or visa." A complete list of acceptable documentation can be found in Form W-7 instructions. It's complicated.
The best blog on this subject is Angela Stone's Quick Guide to the W-7 US Tax Form.
Post to: The United States Embassy
24/31 Grosvenor Square
London W1A 1AE
Tel 0207-894-0476
Or go along there. They're open Tues - Thursday 9 - 4 but don't take your mobile phone as they're not allowed inside the Embassy.
THEN when you've got your number you fill out form W8-BEN: Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. Get here.
Smashwords has its own ebook store and offers free distribution to Barnes&Noble, Apple iBooks and more. How much income you get from each Smashwords ebook sale varies. It depends on whether the sale comes through from Smashwords' own sales site (85% of cover price), from an affiliate sale (via an e-reader, 70.5%) or from Premium Catalogue sales sites like Apple iBooks (60%) and Barnes & Noble.
For a $2.99 ebook you would earn:
$2.21 from each Smashwords sale
$1.84 from each affiliate sale
$1.27 from each Premium Catalogue sale.
The payments come through on PayPal.
For a detailed guide to publishing your own ebooks see:
How To Publish An Ebook On A Budget - An Author's Guide by Stephanie Zia
Buy in the UK here
In the US here
Now that UK and overseas authors can sell their Kindle ebooks via Amazon.co.uk as well as Amazon.com we've been checking up on royalty payments and the US tax situation.
Previously payments were made to all overseas authors via US$ cheques. This is still the case with ebooks sold on .com. You'll have to pay a UK bank charge for paying the cheque in. RBS, for example, charges £7.50 per transaction. Amazon have recently changed their criteria on issuing royalty cheques and now no payment is made until at least $100 is owed. On request (see Smashwords FAQ link below), Smashwords will withhold payments until your US tax number comes through.
Royalties due on ebooks sold on Amazon.co.uk are paid in UK £ cheques and mailed monthly. You have to accrue at least £75 worth of royalties before a cheque is issued. Most ebook sales (at Feb 2011) are still made to the US who are 12 - 18 months ahead of Europe in adopting ebook reading.
If you haven't registered for exemption, Amazon will withhold 30% of all sales made on .com for US tax. To stop this, first apply for a US IRS Individual Taxpaper Identification Number (ITIN) by filling out form W-7: Get here.
Embassy instructions for UK residents are here. UPDATE: Before jumping through all the hoops, try asking for an EIN (Employer Identification Number) which they may issue you with over the 'phone.
When you have accrued at least $10 sales on Smashwords, you can apply for a signed covering letter from them to produce with your documents. Details here.
You need to provide proof of identity. "Either a valid passport (original or a notarized or certified copy); or at least two or more identity documents that are current. One must include a recent photograph. In addition to a passport, examples of acceptable documentation include: national identification card (showing photo, name, current address, date of birth and expiration date); civil birth certificate; foreign driver's license; or visa." A complete list of acceptable documentation can be found in Form W-7 instructions. It's complicated.
The best blog on this subject is Angela Stone's Quick Guide to the W-7 US Tax Form.
Post to: The United States Embassy
24/31 Grosvenor Square
London W1A 1AE
Tel 0207-894-0476
Or go along there. They're open Tues - Thursday 9 - 4 but don't take your mobile phone as they're not allowed inside the Embassy.
THEN when you've got your number you fill out form W8-BEN: Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. Get here.
Smashwords has its own ebook store and offers free distribution to Barnes&Noble, Apple iBooks and more. How much income you get from each Smashwords ebook sale varies. It depends on whether the sale comes through from Smashwords' own sales site (85% of cover price), from an affiliate sale (via an e-reader, 70.5%) or from Premium Catalogue sales sites like Apple iBooks (60%) and Barnes & Noble.
For a $2.99 ebook you would earn:
$2.21 from each Smashwords sale
$1.84 from each affiliate sale
$1.27 from each Premium Catalogue sale.
The payments come through on PayPal.
For a detailed guide to publishing your own ebooks see:
How To Publish An Ebook On A Budget - An Author's Guide by Stephanie Zia
Buy in the UK here
In the US here
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