Canadian Authors- How To Avoid Amazon/Smashwords/CreateSpace from Withholding Taxes

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So, you’re sitting in Cobourg, Ontario, or Biggar, Saskatchewan, or perhaps even Yarrow, British Columbia. You’ve published your e-book masterpiece through Amazon or Smashwords, or maybe you’ve released a print book through Amazon’s print on demand company – CreateSpace. You’ve sold some books and you’re waiting for your royalty cheques to arrive. Your first cheque is 30% light. Your chosen distributor (Amazon, Smashwords, or CreateSpace), has withheld 30% for US taxes. Without following the correct process this will happen.

As a self-published author we sometimes forget that we are indeed the publisher, and our chosen platform is the distributor. Whether we release our e-books through Amazon or Smashwords, or our print books through CreateSpace, we are responsible for submitting our tax information to the distributor. Fortunately, Canada has a tax treaty with the United States, so as a Canadian author we’re eligible for a 0% withholding tax on royalties. Bear in mind we still have to pay tax on our earnings in Canada, but there’s no reason to pay taxes twice. This means that in order to avoid that dreaded 30% shortfall we need to obtain an Individual Tax Identification Number (ITIN). I’m going to show you how to get one and how to submit it.

  1. Apply for an ITIN

I live quite close to the US border so I was able to visit an IRS office in person. If this isn’t an option you can mail in your information.

Here’s what you’re going to need:

a)   A completed W-7 form. Here’s one right here.

b)   A certified copy of your passport from the Canadian Passport Office (you need a certified copy even if you’re visiting in person).

c)   A letter stating that you’re an author who will be receiving royalty cheques from a US distributor. Here’s a link to Amazon’s letter. If you’d like one from Smashwords you can request it via their customer support link.

2. Submit your ITIN in person at an IRS office or mail to:

Internal Revenue Service
ITIN Operations
P.O. Box 149342
Austin, TX 78714-9342

Once you receive your ITIN keep it in a safe place. Do not mail it to your distributor. You only have to submit the information.

For your e-books through KDP (Amazon) you can submit electronically or by mail.

Here are the directions to submit online, taken directly from Amazon’s site:

  1. Sign into your KDP Account at http://kdp.amazon.com
  2. Click on the link found in the top right of the page called “(Your Name)’s Account”
  3. Scroll down to the “Tax Information” section
  4. Click the button to “Complete Tax Information”.

If you’d prefer to send by mail to Amazon you’ll need to fill in a W-8BEN. Here’s where you can find one. And, here are the directions on how to submit the form by mail.

  1. Complete the form using the IRS W-8BEN Instructions.
  2. Sign the form in Part IV – an original signature is required.
  3. Write your Kindle Direct Publishing Account ID in the top margin of the form to match it to your account.
  4. Send the signed original version to:

Amazon

Attn: A/P Tax

PO Box 80683

Seattle, WA 98108-0683

U.S.A.

To submit electronically to Smashwords:

Once you receive your US Tax Identification Number (ITIN or EIN), go into your Payment Settings page and enter your new number (ITIN), into your account.

Or, you can mail a completed W-8BEN to Smashwords here:

Smashwords, Inc.

Attn:  Tax Compliance Dept.

15951 Los Gatos Blvd., Suite 16

Los Gatos, CA   95032   USA

CreateSpace will only accept a hard copy mailed to them. So again, you’ll need to complete a W-8BEN and mail it to:

CreateSpace

c/o AP Tax

PO Box 80683

Seattle, WA 98108-068330k ebook print-final-080114

I know, it sounds complicated, but once it’s done – it’s done. Please bear in mind that although I’ve gone through this process, I am not an accountant or a lawyer, so please consult with a tax professional if you have any questions or if you have other income or revenue coming to you from the US.  The above information was current and tested in August 2014, but may not apply to your individual tax situation. Regulations and tax laws change from time to time so make sure you read the instructions on the above links. And, if you find any inaccuracies in this article please let me know, as I will endeavour to keep this information as current as possible.

UPDATE JAN. 2015

As some of you may have noticed Amazon has now made the process of obtaining ITIN simpler. When you first upload your book you are diverted to an online application process. I walked through the system with an author recently and their ITIN application is now pending. This should make things easier.

It also looks as though EIN is no longer being accepted. EIN is simpler to obtain but from my research it appears at though Amazon (and the IRS) want your ITIN instead of EIN. We’ve been trying to get this information out for the past couple of years and those of you who have done the work and obtained your ITIN should have no problems.

Oh, and by the way, I understand that you can reclaim that 30%, but the process sounds pretty complicated to me.  It  seems much easier to just get the ITIN

If you find this information useful I’d really appreciate if you’d pass it along to your colleagues. Good luck with your books!

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This Post Has 68 Comments

  1. Thanks Martin–I got an EIN. No one quibble, except Xlibris who previously published for me and has published five books for my husband. Eventually, the girl who was resisting emailed to say that she had checked with her superiors and that was alright. Of course we aren’t raking in anything much for royalties–who knows.

    • Martin Crosbie says:

      Yes, but when it does happen you will be ready. My understanding from my tax pro is that EIN is preferable if you’re doing other business in the United States other than book sales. Thanks for bringing it up. I should have mentioned that in the article.

  2. Nadine Travers says:

    Hi Martin,

    Little question, when you have no passport, that’s true. What can I give them??

    Nadine Travers

  3. Hi, Martin,
    The first time I applied for my ITIN, I sent a certified copy of my birth certificate and my driver’s license. They rejected it and said the photo wasn’t clear enough.I didn’t have a passport at the time.
    The second time I sent my passport as ID. They rejected based on not including the Tax Treaty exemption code…D1. I sent it off again last month and am waiting to hear back. Hopefully, the third time is the charm.
    They have deducted taxes on my sales in the US but they told me I can fill out a tax form and they’ll refund it once I have my ITIN.

    • Martin Crosbie says:

      Hi Lorraine. That’s too bad that it’s been a bit of a challenge for you. My understanding is that you will be able to get your withheld taxes back.
      Good luck, it’s definitely worth it.

    • Jude Ouvrard says:

      Im on my third refusal for the ITIN… First, they refused the amazon letter. On my second request, they said my ID’s weren’t certified. and the last time, I had my birth certificate and a certified copy of my driving license + an original letter from Smashwords and they still refused it. So I’m about to get a passport and try for the 4th time.

      I got a EIN number…its working for now. Its easy and quick. I’m still trying to get the ITIN number though.

  4. Excellent read, Martin; I’ve had your book for months, and it’s been incredibly valuable in getting my own book off the ground (called OBLIVION’S WAKE; find it on Amazon; end of shameless self promotion).

    You no longer have to mail a form in to CreateSpace. They recently added the IRS form to their web site. Log into your CS account and look for tax information.

    I found it remarkably easy to get the initial EIN (Employee Identification Number) via the IRS. The process takes about 10 minutes by phone (you can’t do it online). Call this number 267-941-1099 (not toll-free) from 6:00 a.m. to 11:00 p.m. (Eastern Time). It’s painless. They have some basic questions for you, and when you’re done they’ll give you your EIN right over the phone.

    • Martin Crosbie says:

      That’s awesome information. Thank you, Jonathan. I’ll just repeat the warning from my accountant friend, (who is also an Indie author), EIN is preferrable only if you are doing other business in the U.S. That’s why I went the ITIN route.
      I’m really glad to hear you’ve found my book useful. Thanks for giving it a shot and good luck with Oblivion’s Wake!

    • Martin Crosbie says:

      I guess I got lucky. The agent at the IRS office took the stuff put it in an envelope and sent it away. A few weeks later I had my ITIN.
      I’m not sure the agent knew any more than I did but he just mailed it off. I hope it gets handled for you, Jude.

  5. Susan Fish says:

    Your article is very helpful on the US income tax question, except that I’m wondering whether I need to submit the ITIN to every single US-based distributor of my books?

    • Martin Crosbie says:

      Thanks Susan. My books are available through KDP (Amazon) and CreateSpace which is also an Amazon company. Even though my print books are available through multiple outlets thanks to CreateSpace’s (free) Expanded Distribution feature it was only necessary to submit once directly to CreateSpace. And, once to KDP for my e-books. I hope that helps.

  6. Kayvee says:

    Hi Martin et all

    I applied for an EIN on the phone and got it in 10 minutes.
    I used that for my KDP kindle account. and everything went smoothly.

    When I tried to use the EIN for my CreateSpace account,
    the information was rejected by the IRS.

    I know that getting an ITIN number is way more difficult
    and time consuming.

    I just don’t understand how I could use the EIN for the
    Kindle store and not for Createspace, both
    of which are Amazon companies.

    Can anyone help please?

    I would be grateful if anyone could guide me
    in the right direction. I live in Halifax, Nova Scotia.

    • Martin Crosbie says:

      Thanks for reading and commenting.
      Even though Createspace is owned by Amazon it’s still a separate company. Amazon is the parent company, but Createspace run their business
      (with some guidance I imagine), the way they want to.
      And, with tax information as you probably know, there can sometimes by different interpretations of the law. I continue to go back to my
      trusty accountant/author/colleague who maintains that unless you’re doing other business in the US, obtaining an ITIN is the preferable method.
      Good luck!

    • Martin Crosbie says:

      Paddy, I referred to my completed W7 and I don’t see where you need it.
      The IRS official filled mine out and ticked “h” in the top section and then typed in
      “Exception 1 Passive Income”.
      “Treaty Country” and “Treaty article number” are only necessary if you tick off “a” or “f”.

      My paperwork is over two years old now but I don’t believe it has changed.

      I hope that helps and I’m glad you found the article helpful. Feel free to pass it along.

      Martin

    • Username* says:

      Just curious, as I am preparing to send off my W-7 and have encountered the same question regarding whether or not box (a) and (h) should be ticked as that is what the IRS instructions advise. And if so, I am in the same predicament as you regarding the question of Treaty Number etc. I found article XII in the treaty as “royalties” but am unsure. Did you do as Martin mentioned and just tick box (h)? And if so, were you successful?

      Thanks

  7. Linda Nguyen says:

    Hi Martin,

    Great article! Super helpful.

    If I applied for an ITIN and made commissions off my book published on Amazon KDP, would you know if I would be reimbursed any tax deducted off my commissions before I received a ITIN number?

    I’m curious whether I should wait to get an ITIN number before publishing any books or if I should start right away.

    • Martin Crosbie says:

      Apparently there is a way to get the tax back but it involves filing
      a US tax return.
      There’s a two month lag in receiving royalties (if you’re paid by cheque),
      so you’ll have time to get your ITIN.
      There’s no disadvantage to having an ITIN. So, I would apply anyway.
      Good luck, Linda.

  8. D.G. Kaye says:

    Great post! Posts like these help a lot of authors, new and old alike. I did one as well and I thankfully found this info out 2 years ago from David Gaughran’s post on Catherine Ryan Howard’s blog. The comments are still rolling in there too from a post of at least two years old. I have heard recently from another Canadian friend author that the stipulations are changing and it’s now going to be easier for Canadian authors to avoid the dreaded 30% holdback without the forms. It may be premature but here is the link to her post if you are interested. http://www.dianetibert.com/2014/11/07/update-on-canada

    • Martin Crosbie says:

      That’s great information. Funnily enough I was helping an author upload their book yesterday and we noticed that Amazon have simplified the system.
      Looks like my blog needs an update. Thanks for commenting.

  9. Hi, Martin,
    They say the third time’s the charm, but my third application was just rejected. The first time it was my ID, so I got my passport. The second rejected because of one word. (lol) and this one they said I wasn’t eligible, even though I’ve submitted the Amazon letter every time. I’m going to try the EIN. Maybe that will work. 🙂

    • John says:

      So guys…Im in canada

      and this is what I did

      I didnt want to bother with ITIN….too time consuming

      I used my EIN and I chose “corporation” as the type of owner

      Because if you choose individual or sole proprietor you will be rejected

      • Martin Crosbie says:

        I’m glad it worked out for you John. As I mentioned to Lorraine it is indeed a moving target and what seemed to have been simple a couple of years ago has become more difficult. My (non-expert), understanding is that if you’re doing other business in the US then EIN is preferable. I’m glad I have my ITIN and don’t have to go through it again. Thanks for commenting.

    • Martin Crosbie says:

      Lorraine, I’m sorry to hear that you’re having problems. It is indeed a moving target. I’ve seen some authors have no problem at all and others seem to be rejected by seemingly insignificant details. I helped an author upload their book the other day and Amazon have instituted a program where you can apply for your W8 through them with an electronic signature. Perhaps that would be the way to go for you.

        • Martin Crosbie says:

          SIN number currently is sufficient. As I mentioned in a previous comment Amazon have simplified the process. You can now apply for your ITIN when you upload your book or enter your SIN.

  10. Rhyanna says:

    omg, I’m trying so hard to figure out how to publish through Kindle/Amazon as a Canadian….this is the clearest explanation I have found so far. (thank you!) So from my understanding of your most recent update, I just have to upload my writing first? and not do anything before hand? and it will allow me to apply for a ITIN? Nothing else to do before hand? And am I to assume that a SIN is NOT the equivalent of a US TIN?

    • Martin Crosbie says:

      Yes, to all of your questions, Rhyanna. The online form should help you to apply for ITIN. If it does not you can just follow the directions in the article. Good luck!

    • Martin Crosbie says:

      The reason you need ITIN is so that you can receive all of your earning from Amazon etc. as opposed to having them hold onto 30% for the IRS. If you’re receiving the total amount through your website I don’t know why you’d need a tax number. But, as always, I encourage you to confer with your accountant.

      • Steve says:

        I just changed my Create Space and KDP Select info following the advice in this link http://www.dianetibert.com/2014/11/07/update-on-canada#sthash.toQw8GtG.dpuf that someone else left you up above and gave my SIN as my country’s tax ID number, and sure enough, now in both dashboards it says my withholding tax amount says 0%.

        So the SIN *does* work now in the newer version of their tax interview process.

        However, what is your opinion: I suppose I would still need an ITIN or ETN if I wanted to apply for the refund for the 30% the IRS has withheld from me until I had made this change, would you think?

        • Martin Crosbie says:

          Thanks Steve. Yes, I spoke to an author yesterday who said her SIN also worked. She’s going to apply for ITIN anyway just in case she needs it in the future. I still think it’s the best route to take.
          I believe (and again, check with a tax professional on this) that you have to file a US tax return to receive your refund. I’m not sure if ITIN is necessary at that point.

  11. Brigadoon says:

    I am a Canadian author but my co-author who is entitled to 50% of the profits from our books is British. I get the books printed as needed and invoice the purchaser. I send 50% of the net income to my co-author. Do I have to withhold tax or is there a simpler (non-withholding tax way to conduct our business?

    • Martin Crosbie says:

      My advice would be to check with your tax professional. I haven’t had experience with that type of situation.

  12. KPerron says:

    Wow. I really wanted to read this but that floating “subscribe to my newsletter” / “follow my blog” box on the right is SO annoying I just can’t. Sorry, you’ve just lost a reader.

    • Martin Crosbie says:

      Hi, thanks for this!
      I eavesdropped on a conversation between a Canadian author and her Amazon rep last week. Amazon told her that for Canadians they will accept S.I.N. but will no longer accept EIN. So this is a good thing.
      But, they also hinted that in the future ITIN may be necessary.
      I know the application process can be a pain but I still recommend going for it.
      Thanks again.

  13. AlbertaSelfPubAuthor says:

    I have a tax question…. Last year was my first year i ever had to do taxes…(i was a stay at home mom before that and my husband just did everything online) since we didn’t know how to do the KDP tax stuff we went into H&R block to get our taxes done… I’m wondering if i can just do these taxes online? my husband watched her do everything, but we’re not sure if i can do it online since it’s a USA ‘T4’ I get.

    • Martin Crosbie says:

      Personally, because there are a number of opportunities for write-offs, now that I have income from my writing I would never do my taxes myself. My advice would be to hire someone who is familiar with your situation. My tax person works out of H&R Block also and now that they know what I’m doing and what’s involved I can’t imagine using anyone else. I’d tread carefully. I’m not sure where in Canada you are but if you’d like to email me I’d be happy to pass along my agent’s name to you.
      martin@martincrosbie.com

  14. Nola Bogie says:

    I am a Canadian author. All I needed was my Social Insurance Number (Canada’s version of Individual Tax Identification Number is our SOCIAL INSURANCE NUMBER. (Did not get Ein or ITIN)..and am now confirmed 0% Royalty withholding WITH SMASHWORDS, KINDLE DIRECT PUBLISHING AND CREATESPACE. Each publisher needs its own individual W8BEN.
    It is the IRS we thank. Their Instructions confirm…American ITIN…AND/OR FOREIGN.
    I have been researching the ever-changing process to get the ZERO % Royalty withholding with American “publisher/printers”.I now have accounts with 4 of them…(Kobo Writing Life..which is Canadian and did not need the W8BEN).
    But my accounts are now confirmed at 0% with Amazon Kindle Direct Publishing (KDP), Amazon CreateSpace, and also Smashwords. THE IRS INSTRUCTIONS for the W8BEN clearly say…for #5…fill in the American ITIN…which means the Individual Tax Identification Number). Then Number #6 says…AND/ OR YOUR FOREIGN ITIN. (In Canada that is our Social Insurance Number..whatever you use to file your income tax).Smashwords I did at New Years. Their website still had the old routine applying for ITIN, but by email, they confirmed, contacted their tax department and gave me an exact address including the word “Tax Compliance”. I mailed a paper copy signed, with my Social Insurance, my e-mail in #7, because they direct deposit to all non-American authors into a PayPal. They simply had not yet updated the website to allow you to complete the form on-line. I have a huge orange sign on my Payee page saying Royalty withholding 0%.
    Just a couple of days ago, with both KDP and CreateSpace, their on-line forms are identical. At the end, you have the option of electronic signature, or printing and mailing them a signed/dated copy. Both have confirmed information was accurate, accepted, and now at 0%.
    The old routine required use of an Acceptance agent from IRS website (2 in my area charge $400-$600 just to submit even though I had duplicate authentic copies of driver’s license and passport, and had W7 filled in. All he had to do was submit…so I walked out. Wonderful change.Now just file with Revenue Canada.

    • Martin Crosbie says:

      That’s great news, Nola. Thanks for sharing. I’m disappointed that you were almost charged $400 + for a service we can pretty well do ourselves.
      As you said, currently S.I.N. is acceptable. If it stays that way we’re in good shape. If not then I.T.I.N. is probably where we’re headed.

  15. Robert says:

    This is slightly off topic Martin, but I’m wondering if there is an advantage for Canadian authors to sell on amazon.com rather than on amazon.ca.

    I’m assuming that since the US is a bigger market, there must be a better commission split doing it that way.

    • Martin Crosbie says:

      Hi Robert, it’s a great question and I should probably write a post on just that subject.
      Your book will automatically be available for sale in Canada (.CA) as well as across all of Amazon’s other markets including the US (.COM) when you release through Amazon.
      As Canadian purchasers we can purchase through .COM if we haven’t migrated our account over to .CA. Amazon prompts our readers to migrate by suggesting they switch each time they make a purchase if they are indeed in Canada purchasing through .COM. Encourage your readers in Canada to continue purchasing through .COM. The royalty return is the same, but their purchase will help your rankings on the Amazon.com product pages as opposed to Amazon.ca pages. And, as you mentioned that’s where the larger market is and that’s where we want to see our book rising up the rankings. I hope that helps.

    • Nola Bogie says:

      Hi from Nola You wrote:
      “That’s great news, Nola. Thanks for sharing. I’m disappointed that you were almost charged $400 + for a service we can pretty well do ourselves. As you said, currently S.I.N. is acceptable. If it stays that way we’re in good shape. If not then I.T.I.N. is probably where we’re headed.”
      It was the IRS actual Instructions for the W8BEN #5 SAYS AMERICAN ITIN # 6 says…and/or FOREIGN ITIN.
      ITIN simply means INDIVIDUAL TAX IDENTIFICATION NUMBER, which is used by all countries that that file income tax, ITIN for short. This is why the American IRS wrote…FOREIGN ITIN.
      Since I am Canadian, I will only purchase through Amazon.ca.

  16. Justin Lo says:

    Hi, Martin,
    I am going to publish a book, but it will be under my company (incorporated in Canada). Do I need a EIN for Createspace and Amazon? Is there a way around it?
    Thanks,
    Justin

    • Martin Crosbie says:

      Justin, I’d check with your tax person on that one. Please let us know what his answer is.
      As an individual you can currently use your SIN. As a company, I’m not sure.

  17. psullivan says:

    I applied to the IRS for an ITIN using the W-7 form, but it was rejected because I didn’t quote the “Treaty Article number” applying to publishing books and having taxes collected and paid by a third party (Apple, Amazon, Lightning Source).

    Do you know what the treaty article number is?

    Thanks
    Pat Sullivan

    • Martin Crosbie says:

      Pat, I think you’re referring to the first section of the W-7? In that section I ticked “h” and wrote “Exception 1 Passive Income”.
      Or rather, the IRS agent who helped me fill out the form filled it in that way. Email me directly if you’d like me to go over the form but bear in mind that it may have changed since I applied in 2012.
      martin@martincrosbie.com

  18. dozarko says:

    After a day of frustration trying to figure this all out, including 40 minutes on the phone with an IRS agent, I discovered the simplest solution at this website http://bit.ly/1M6sEUy. I then went back to my Createspace account and updated the tax form according to these instructions and voila, the withholding tax went from 30% to 0%. I can’t believe I lost an entire day of productivity with this nonsense. Leave it to the government to complicate what should be very simple … and actually is very simple. The problem is that many of us look to the American entities for solutions, when they have no clue how to handle it properly. After all, they know nothing about how things are run up north. They do know that Justin Trudeau is sexy though. Groan.

    Incidentally, for anyone who chooses to still go the ITIN route, the IRS agent told me to check off box “a” and “h” in the first section of that form. He proceeded to then tell me to write “Exception 1D” next to “h”. Directly below box “h” where it indicates “additional information”, he told me to write: “Treaty country: Canada” and “and treaty article number” 12. More information on this can be found at this link https://www.irs.gov/pub/irs-pdf/iw7.pdf.

    Hope that helps. More importantly, I hope that makes for easier breathing.

  19. Claudia says:

    Hi Martin,

    Thank you very much for this article. It was very informative and helpful. I am starting my venture in creating my first book, and hoping to sell on amazon. I have a few questions, and I’m wondering if you’ll be able to help answer.

    From your article, you’re more focused on ebook format. Does this also apply to printed books? I’m asking because I’m planning to make a journal, and the ebook format is not the best idea.

    Also, I saw that you’d updated at the end of the article to say that you can now apply for the ITIN through amazon. I’m just wondering if you can elaborate a bit about the process, i.e., will you still need a certified copy of your passport, etc? I’m asking this because I haven’t actually opened up an account yet with Amazon.

    And lastly, I’m wondering if US is the only country that you’ll need to fill out forms such as this? If your book is being sold to other countries, i.e UK, do we need to do anything similar?

    Thank you,
    Claudia

    • Martin Crosbie says:

      Hi Claudia,
      I’ll try to answer your questions.
      Yes, as a Canadian you’re either subject to Amazon withholding taxes or you need an exemption. My exemption is my ITIN. This is true for print or e-books.
      I haven’t gone through the process of applying for an ITIN through Amazon’s system but here’s what they say: “Your application must include all of the following:

      i). Your completed Form W-7.
      ii). Your original, valid tax return(s) must be attached to the application. There are exceptions to the requirement to include a U.S. tax return. Please see the IRS instructions for additional information on exceptions.
      iii). The original documents, or certified copies of these documents from the issuing agency, that support the information provided on the Form W-7. Please see the IRS instructions for additional information on certified copies”.
      It sounds like you’ll still have to submit certified documents.
      And fortunately the US is the only country that requires a tax exemption. I receive monies from Amazon for sales made in the UK, Australia, Germany, etc. with no funds withheld.
      I hope that helps.

      • okjo says:

        Hi Martin
        Your experience has been mine also. I’m Canadian. The IRS documents were handled through my US publisher. Similarly, I receive royalties for sales in the UK and elsewhere overseas without any tax issues. I just declare the income on by CRA filings.
        James Osborne

    • Nola Bogie says:

      To both Claudia and Martin.Please be thrilled.Your information is no longer accurate. Links at the bottom to IRS PDF W8BEN form Feb 2014, and IRS Instructions. On the form, # 5 asks for American ITIN (individual Tax Identification Number (LEAVE IT EMPTY) #6 Asks for FOREIGN ITIN (Canada’s is Social Insurance Number.) You don’t need the American ITIN any more. Around Christmas of 2014, the procedure changed involving NON-AMERICANS with American publishers. Now, you never are involved with IRS and AMERICAN ITIN. All you need is your “Foreign”ITIN (Individual Tax Identification Number..Social Insurance Number) Described below. By law, American publishers must send 30 % Royalties to the IRS.But,.Canada’s Treaty sets it at Zero,with the W8BEN filled out with EACH company (NOT WITH IRS). That complex and expensive procedure to get ITIN for the IRS, and filing American Income Taxes IS NO LONGER NEEDED.
      WONDERFUL CHANGE. Canada has a Treaty which , thanks to the IRS itself, we no longer even get involved with the IRS. (so beautifully simple now). Christmas 2014, I created accounts with 3 American publishers: Amazon Createspace for paperback, Amazon Kindle Direct Publishing for e-book, and Smashwords for e-book Smashwords has huge distribution and will list you with iBooks and Kobo (Canada). Now,you do not need to ever be involved with the American IRS.
      I chose the 3 American publishers. You go to each publisher’s website, create the account, and from your account you fill out a W8BEN which they all have now. One question asks for your (AMERICAN ITIN). You do not NEED one now…just leave empty. The next question asks for your FOREIGN ITIN (Canada’s is called the Social Insurance Number. You can actually sign electronically, and be sure to print out a paper copy for legal records. Within a day, all 3 of mine confirmed that according to the Canadian Treaty with United States, my Royalty withholding was now set at ZERO PER CENT. I posted this information on Linkedin 15 months ago, and there were so many grateful authors. I even provided links to the IRS W8BEN guidelines which clearly say this. It was a nightmare before. I had to use an Acceptance Officer which you find on the IRS website looking under your city.I had everything ready,because at that time it was the previous procedure for getting ITIN. I had certified copies of birth certificate,passport,W7..everything was done and ready. He announced…$600. I gasped, and said..everything is ready. He said it made no difference, so I gathered everything, and quietly left. It was Christmas of 2014 that Smashwords and Amazon confirmed the change. I was done with all three in short time, on line. Wonderful, and authorized by IRS. IRS W8BEN Instructions.https://www.irs.gov/pub/irs-pdf/iw8ben.pdf
      IRS W8BEN Feb.2014.https://www.irs.gov/pub/irs-pdf/fw8ben.pdf

  20. Warren says:

    Hi, what about HST?

    Usually if a book is purchased in Ontario we see 5% GST on it.

    Is Amazon collecting GST on ebooks or are ebooks exempt?

    The reason i ask is when i tell my account i am selling books on Amazon he is naturally going to ask. Which of your sales are canadian. Then if i say. $4000 was canadian. He will then say, did you charge GST?

    I’m not in control of that, and from what i can see amazon does not state anywhere that they collect GST which means i can’t pay the tax man that if they haven’t collected it.

    Also they don’t break it down which province.

    FRom what i can glean from amazon.ca tax details is that books are exempt?

    Any thoughts on this?

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