This page is in the process of being updated / Nov 2020
This is not anything sinister! It is an annual requirement of distributors who deal with US customers – e.g. Amazon, Smashwords, Draft2Digital – but must be completed to enable you to keep on selling. I’ve used “Amazon” here as the default because of the larger proportion of authors who deal with them.
Basically, Amazon is looking to confirm
(i) that your details remain the same e.g. your country, your tax status, your trading name, so that your account with them can continue unchanged.
(ii) that your tax status as a UK authors is till the same. This has implications for whether or not they deduct US tax at source i.e. before sending you your royalties.
The best guide I’ve found so far – short of creating my own *g* – is at Catherine Ryan Howard’s blog, which I’m reproducing here with her permission. Please feel free to check out her blog, she has a lot of interesting content for self-publishing authors.
NOTE DEC 2014: if the order of the screens below is slightly different for you, the content should still be the same. Click on a screen shot if you want to see it a little larger.
This information is intended for self-publishing individuals who are non-U.S. residents and who have secured ITINs* from the IRS in order to claim tax treaty benefits OR who have the tax identification number from their own country.
*if you trade with your distributor as a limited company rather than an individual, this will be your EIN.
If you don’t know what any of that means! read this post first.
These screenshots are from Amazon KDP’s tax interview. Other online tax interviews should have the same content.
1. Click YES to consent to providing an electronic signature and YES to consenting to electronic receipt of your information. This just means you avoid posting any forms. Hooray!
2. You are none of those things, so select NO.
3. Fill in your personal information. A little check box will appear at the bottom saying “Please confirm your address is valid.” Confirm it.
4. Fill in your ITIN if you have one. Alternatively you can enter your own tax identification number. In the UK this is your NI number; in Ireland it’s your PPS number.
5. If any item on that list applies to you, you’ve shown up to the wrong party. (“Spent time” does not mean “two weeks summer holiday in Orlando”. It means more than a tourist visit, which is 90+ days.) So either click CONTINUE or exit this process.
6. Select YES or NO.
7. This screenshot is misleading because really, I didn’t have to enter anything here. You ONLY fill this in if you are resident for income tax purposes in a country OTHER than the one in which you live.
8. Now Amazon will tell you what the tax treaty benefit is, if there is any, for your country.
9. Say NO. If all you’re doing is self-publishing with Amazon KDP, Smashwords, etc. you DO NOT have effectively connected income. Look at the small print: ASSETS, people. What assets do you own at Amazon HQ, eh? NONE.
10. Now Amazon generates your electronic W-8BEN…
11. Check all the boxes 1-4 and fill in the boxes underneath (this is your electronic signature). You’re acting as an individual. Click SUBMIT W8 and stick a fork in us, we’re done!