Post: #1

A year back I put my ebook on the US site Amazon, it didn't sell at all but what the heck at least I tried to give it some international exposure.

Now I recently got an email from Amazon demanding that I fill out a tax information form for the US government. The explanatory link in the email doesn't explain much: https://kdp.amazon.com/self-publishing/help?topicId=200641090

Apparently the US government wants to charge income tax on Amazon royalties.

Since many of you guys publish your own ebooks, I wanted to ask:

- This tax form thing, is it a new thing or has it been around for a while?
- What info do you have to share? I'm not keen on sharing my personal details with a rising neo-totalitarian state.
- It appears that the US government wants to withhold a percentage of royalties as income tax. I haven't made any money worth mentioning but I wonder how does this translate into figures if you are a successful kindle author?
- Also, it appears even non-US residents will have income tax deducted from their royalties and they will have to claim it back from the IRS on a tax return. Am I understanding this correctly? Are foreigners even eligible to file a tax return to get a possible refund?
- Bizarrely even the Canadian, Indian, and Japanese websites fall under the US taxation system. How does that work?
- Overall, this appears to be a way of mining the royalties of small scale non-US authors. As a foreigner, am I really going to be able to get my tax return from the United States? I'd imagine most foreign authors would not have the time/money/resources to actually claw back their taxes. Or is getting a tax return from the IRS easy?

I'm thinking of just letting my ebook page on Amazon lapse rather than hand over all my info to what for me is a foreign government, but I want to find out what other people think of this.

Post: #2

You didn't write which country you're in, but I'll assume South Africa based on your flag. SA has a tax treaty with the US, and Article 12 covers royalties:
http://www.irs.gov/pub/irs-trty/safrica.pdf

That's why this comes up -- both countries have agreed on how and when to tax the other country's citizens, depending on the type of income and where it is earned. There's also an information sharing clause, to help prevent tax evasion.

In short, it's in the best interest of both countries to not miss out on revenue, that's why these exist. My guess is Amazon is just complying with the laws.

Post: #3

Oh, as for getting taxes back, Amazon will issue you a 1042-S each year. You can then file a 1120-F with the US IRS if you can get some of the withheld taxes back. Royalties are a fairly straightforward case, so my guess is Amazon will properly withhold them based on the US-SA tax treaty, and thus nothing will be due back = no need to file.

Post: #4

Amazon started to charge sales tax on purchases as of Sept 1st , was only a matter of time. If you do a little price comparison you will find amazon is no longer the cheapest option due to this. Amazon prime is a rip off, you can buy the same product + pay for shipping and it still cheaper than a prime listing most of the time.

Post: #5

I don't know how it is with Kindle, but for Amazon Associates I believe they only 1099 you if you make over $600 a year.

Post: #6

(09-04-2013 12:06 PM)PartyonBro Wrote:  I don't know how it is with Kindle, but for Amazon Associates I believe they only 1099 you if you make over $600 a year.

That may only apply to US residents, since $600 is the general cut-off for a 1099 to be issued.

Another mitigating factor is Kindle sales are often treated as royalties, which are separately classified (and taxed) in tax treaties compared to just the usual "sale of stuff" kind of transactions.

Post: #7

(09-04-2013 01:58 AM)paninaro Wrote:  Oh, as for getting taxes back, Amazon will issue you a 1042-S each year. You can then file a 1120-F with the US IRS if you can get some of the withheld taxes back. Royalties are a fairly straightforward case, so my guess is Amazon will properly withhold them based on the US-SA tax treaty, and thus nothing will be due back = no need to file.

I'm going to guess the author is writing as an individual vs. a corp and would need to go the non resident 1040NR route. The problem is that requires as taxpayer ID...it used to not be a big deal but now you have to send in original documentation for it. Would you want to send in your passport to the US gov't? No thanks.

Also, the tax and witholding comes from the 1099-K not sales tax I think? 1099-k meaning that 3rd party payment processors like amazon and paypal have to send the IRS official information on you over a certain income limit.