E-publishing, self-publishing, and the Taxman.

I’m learning something new every day. Just like you don’t submit the first draft of anything you write, when you self-publish your novel, you don’t just upload the files and wait for it to go live. Sometimes you have to jump through a few hoops, or you don’t get all your money.

That’s right. I said ALL YOUR MONEY.

I have an account with Smashwords (why not publish under both, right?), but there’s not very clear, at least, not in my opinion. They just say that the Royalty Rate is 60%. So if you publish with them, you get 60% of your money? If you publish with Smashwords, and understand their tax rate, let me know please.

Now, Createspace is American so there’s no real problem if you’re American. You just give them your tax number and you’re set, but for those who, like myself, don’t live in the States, it could get a bit tricky. You have to fill out a Royalty Payment Information form before they can release any royalty.

Some of you may not know, but if you live outside of the U.S. and make money IN the U.S., that business is subject to a WITHHOLDING TAX. Canadians know about this, because when we go down to the States and gamble, the establishment keeps 30% of the winnings. That is the Withholding Tax.  Sucks, I know, but there is a way around it.  You still have to fill out a form and submit it to the IRS and get your own tax number.  The standard tax-withholding rate for non-U.S. members is 30%, so that means they withhold 30% of any money you make, and authors make Royalties.

From the Createspace site:

“If you are a non-U.S. member and your country has an established tax rate treaty with the U.S., you may be eligible for treaty withholdings rates if you provide us with a valid W-8BEN.”

Here are some common tax withholding rates by country, which are subject to change without notice:

•Canada: 0%

•Australia: 10%

•UK: 0%

•Japan: 10%

•India: 15%

Well aren’t I lucky, as I’m Canadian the tax withholding rate is 0%, but I have to get a U.S. Tax Identification Number for an individual, and in order to get a W-88EN form that Amazon/Createspace wants, and I need to fill out and return a W7 form before I’m eligible for the 0%.

Then, as I’m reeling from the fact I have to deal with a tax agency in another country, I scroll down and notice this:

“Neither a TIN nor W-8BEN form are required to receive royalty payments, however, if you choose not to provide a W-8BEN, we will withhold 30% of your earnings for tax purposes regardless of any tax treaties your country may have with the U.S.”  

Okay. Great, I can live with those conditions, but then I thought, what about my own country? What’s the deal with claiming royalties with Revenue Canada? So to the phone book I went. After calling several numbers and finally getting the right department, I got a busy signal.

To be continued…


About Darke Conteur
Darke Conteur is a writer at the mercy of her Muse. The author of stories in several genres, she prefers to create within the realms Science Fiction and Dark Fantasy. A pagan at heart, her personal goal it to find her balance within nature; exploring the dark through her stories and the light through her beliefs. When not writing or working with crystals, she enjoys knitting, gardening, cooking and very loud music.

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