Subscribers to The Writer’s Drawer will know that I am self-publishing an anthology from the website. Its title is A Certain Kind of Freedom: Stories and Poems from The Writer’s Drawer, and it will be sold on Amazon, both in print and as an ebook. I am using Amazon’s acquisition CreateSpace to publish the book and I was aware from the outset that this process would not be simple. Aside from the technical problems of designing a cover and getting the file into the correct format (I’m using a specialist for those parts), as well as pricing and marketing of the final product, many people are unaware that there are legal – or more specifically, taxation – issues involved, especially if you’re not an American citizen.
According to Amazon/CreateSpace, which are registered in the U.S. and therefore pay that country’s taxes:
“The U.S. IRS requires CreateSpace to collect up to 30% from royalty payments issued to non-U.S. entities. The tax withholding will automatically be deducted from your royalties when they are paid.”
Being somewhat inexperienced in such matters, my first reaction on reading those sentences was shock and anger. Why should I pay taxes to the U.S. authorities when I’m neither a U.S. citizen nor residing in the United States? I decided to plough on through the legalese, nonetheless:
“You may be eligible for a reduced rate of U.S. tax withholding if your country of permanent residence… has an income tax treaty with the U.S.”
This is followed by a link to an IRS [Internal Revenue Service] publication, which lists countries with such treaties and the tax rates their citizens pay on copyright. This ranges from 0% for an EU country, upward.
I note that Israel has such a treaty, offering not 0%, but 10%, reasonable enough to investigate further. I discover that in order to obtain this reduction, you must register with the American authorities and get a TIN [Taxpayer Identification Number]. In other words, you have to fill out a form and get a tax number, like any tax-paying American. Sounds simple? Not quite. You must also provide documentation, either in original form, or a certified copy; if the latter, it must be authenticated by the issuing authority.
Besides my initial unwillingness to become a foreign, non-resident American tax payer, I was also unhappy about sending the IRS my passport (their favored document). I therefore contacted the “issuing authority” – in my case the interior ministry. Never heard of such a thing, and certainly won’t do it, they said. I thought about a notary, but knew that this would not satisfy the IRS. I contacted the commercial section of the U.S. embassy; they didn’t know what I was talking about.
Finally, I called the IRS itself – international section. And I got an answer. The American consulate has a notarial service which, for a not inconsiderable fee, of course, will certify a copy of your passport.
So I made an appointment online at the consulate and was given a date and time. I also scanned the “security tips” section, as I was aware that the Americans are very strict about entry into their territory. It turns out you are allowed a small handbag, a small purse, a book, keys, and not much else – certainly not a cell phone/mobile (or lip balm!).
So on the appointed day, I set out for the embassy – somewhat unnerved by all their rules and strictures about visitors entering their hallowed grounds, and discarding along the way everything but my documents and purse. After some initial puzzlement among security about the purpose of my visit (since I am not a U.S. citizen, I had forgotten that the notarial service is in the American Citizens Services department), I was permitted entry, and within five minutes was out again, having accomplished my mission.
The next part of the process is to complete a form, send it off, together with the precious certified copy of my passport, to the IRS, wait up to eight weeks and hopefully get a number. Only then can I fill out an Amazon tax form, giving the number I’m allotted, and wait another four-six weeks.
I hope this saga will have been worth it in the end. But, jeeze, as they say, will I not be, then, an honorary U.S. citizen?
According to Amazon/CreateSpace, which are registered in the U.S. and therefore pay that country’s taxes:
“The U.S. IRS requires CreateSpace to collect up to 30% from royalty payments issued to non-U.S. entities. The tax withholding will automatically be deducted from your royalties when they are paid.”
Being somewhat inexperienced in such matters, my first reaction on reading those sentences was shock and anger. Why should I pay taxes to the U.S. authorities when I’m neither a U.S. citizen nor residing in the United States? I decided to plough on through the legalese, nonetheless:
“You may be eligible for a reduced rate of U.S. tax withholding if your country of permanent residence… has an income tax treaty with the U.S.”
This is followed by a link to an IRS [Internal Revenue Service] publication, which lists countries with such treaties and the tax rates their citizens pay on copyright. This ranges from 0% for an EU country, upward.
I note that Israel has such a treaty, offering not 0%, but 10%, reasonable enough to investigate further. I discover that in order to obtain this reduction, you must register with the American authorities and get a TIN [Taxpayer Identification Number]. In other words, you have to fill out a form and get a tax number, like any tax-paying American. Sounds simple? Not quite. You must also provide documentation, either in original form, or a certified copy; if the latter, it must be authenticated by the issuing authority.
Besides my initial unwillingness to become a foreign, non-resident American tax payer, I was also unhappy about sending the IRS my passport (their favored document). I therefore contacted the “issuing authority” – in my case the interior ministry. Never heard of such a thing, and certainly won’t do it, they said. I thought about a notary, but knew that this would not satisfy the IRS. I contacted the commercial section of the U.S. embassy; they didn’t know what I was talking about.
Finally, I called the IRS itself – international section. And I got an answer. The American consulate has a notarial service which, for a not inconsiderable fee, of course, will certify a copy of your passport.
So I made an appointment online at the consulate and was given a date and time. I also scanned the “security tips” section, as I was aware that the Americans are very strict about entry into their territory. It turns out you are allowed a small handbag, a small purse, a book, keys, and not much else – certainly not a cell phone/mobile (or lip balm!).
So on the appointed day, I set out for the embassy – somewhat unnerved by all their rules and strictures about visitors entering their hallowed grounds, and discarding along the way everything but my documents and purse. After some initial puzzlement among security about the purpose of my visit (since I am not a U.S. citizen, I had forgotten that the notarial service is in the American Citizens Services department), I was permitted entry, and within five minutes was out again, having accomplished my mission.
The next part of the process is to complete a form, send it off, together with the precious certified copy of my passport, to the IRS, wait up to eight weeks and hopefully get a number. Only then can I fill out an Amazon tax form, giving the number I’m allotted, and wait another four-six weeks.
I hope this saga will have been worth it in the end. But, jeeze, as they say, will I not be, then, an honorary U.S. citizen?
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