USA Withholding Tax for Non-USA Writers/Publishers

Life is never simple, is it? More specifically, the old saying: “There are only two certainties in life, namely taxes and death…” is still perfectly valid.

I refer to the USA IRS regulation that requires anyone running a business which involves sales in the USA, to register with them, and to pay tax on the sales, unless there is an income tax treaty on record with the USA. If the latter applies, you may qualify to pay less tax, or even no tax, but you will still have to declare the income in your own country, following your country’s tax legislation.

This requirement has been the source of many grey hairs on many heads, including mine; partly due to difficulties in understanding the forms involved in the process, and partly due to gathering the information required to fill in the form(s).

However, there is good news for those people who are only just becoming aware of the matter. The procedure has become fairly straightforward, while forms and information are available online at:

http://www.irs.gov and

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-to-Apply-for-an-EIN

Very briefly, to avoid this becoming a long and probably soon-outdated article, here is an outline of what’s what:

  • Most people will need to complete a form W-8BEN in order to obtain an EIN (employer information number), which has to be presented to whoever you deal with in the USA.
  • The procedure can be completed over the Internet.
  • However, the simplest method is to complete the process over the phone. There may be delays (although many people report quite a prompt service), and you’re phoning the USA, but the benefit is that you’ll have a human being on the other end of the phone, who will help you and save you pulling your hair out through trying to find out what does and what doesn’t apply to you. Believe me, it can get very frustrating – the cost of the phone call is well worth it.
  • If you don’t go through with this, you’ll soon find that 30% withholding tax gets deducted from your USA income. This applies to all income – royalties, direct book sales, etc.
  • Here is the phone number you need, and other current (August 2013) details:
    Taxpayers can obtain an EIN immediately by calling the Business & Specialty Tax Line at (800) 829-4933.
    The hours of operation are 7:00 a.m. - 7:00 p.m. local time, Monday through Friday.
    An assistor takes the information, assigns the EIN, and provides the number to an authorized individual over the telephone. Note: International applicants must call (267) 941-1099 (Not a toll-free number).

There’s much more information and replies to queries from people all over the world, at the following blogs:

http://catherineryanhoward.com/2012/02/24/non-us-self-publisher-tax-issues-dont-need-to-be-taxing/

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