Reduce your Withholding Tax on Author Commissions from Amazon for Aust | Sharny and Julius
May 24, 2012

Reduce your Withholding Tax on Author Commissions from Amazon for Australian Authors

Amazon, being a US company will withold extra tax from you.  To mitigate this, just sign up for a US tax ID.  Sounds complicated, but it's not.

You can get an EIN (Employer Identification Number also known as a Federal Tax Identification Number) in your business name, or if you do not have a registered business name, in your own name.

If you call the IRS on 267-941-1099 and ask for an EIN they can issue it over the phone. It takes about 10 minutes and you will need your Australian Tax File Number.

use a service like Skype to make the call so you can do it cheaply.

Once you have that you just fill out a W-8BEN form and send it to CreateSpace, kdp, itunes,etc

Instructions about form: http://www.irs.gov/pub/irs-pdf/iw8ben.pdf

Form: http://www.irs.gov/pub/irs-pdf/fw8ben.pdf

The tax treaty between the US and Australia is Article 12

This allows you to pay only 10% withholding tax on book royalties

For the reason you are using the W-8BEN form you put "Australian author self publishing via US distributor"

You only need to get an EIN once

BAM! you're on amazon, earning commission cheques within a week!

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