I’m sure many of you have heard about how difficult, time-consuming, and expensive it can be to try and obtain an ITIN (individual tax identification number) from the IRS, which is required to stop Amazon and Co. withholding the required 30% tax from non US authors.
But recently I’ve been hearing about a lot of authors getting an EIN (employee identification number) instead, and it’s been easy peasy! So since I’ve recently set up my own company, I thought I’d put it to the test.
All I did was ring this number: 001 267 941 1099 and answer a list of simple questions about me and the business. Ten minutes later, I was given my EIN over the phone, with a promise to send all relevant paperwork relating to it within the next month. Woo hoo! After that, you just need to send a W8BEN form to Amazon, and any other company you sell through, and they’ll follow the appropriate tax treaty your country has with the US. In my case the UK’s treaty means that my US royalty tax withholdings will be set at a big fat zero! Here’s an example of how to complete the W8BEN form for a company.
Now, as the name suggests, you have to have a business to take advantage of the super-quick EIN hotline, and these are the guidelines stated by the IRS. They mention a corporation or partnership, but I would assume that sole traders would also be eligible to apply. If you are able to go this route instead of having to apply for the dreaded ITIN, I’d definitely go for it. It took me about ten minutes!
Now, getting Amazon to pay non US authors by direct EFT payments into their bank accounts is another story! Unfortunately, even once we’ve got the EIN number, we still have to get paid by paper cheques, which are not only expensive and can take a long time to clear, but which often get lost in the post. I’ve emailed Amazon so many times regarding this issue, and it would be helpful if all non US authors could all do the same. Interestingly, Createspace (an Amazon company) has just started doing EFTs to non US bank accounts – surely Amazon has to follow suit?
So, how about everyone out in WG2E land? Have you managed to get an ITIN trouble-free or did you go for an EIN?
Happy Writing – Sibel XX