Setting up an account on Amazon’s Kindle Direct Publishing service (KDP) now requires you to submit the information they need to deduct the correct amount of tax from your royalty payments. The process is not very intuitive and the documentation difficult to understand as it is intended to cater for a wide range of eventualities. What follows is a description of what you have to do if you are not a US citizen, do not have any other operations in the US, and are not operating as a limited company. These details are specific to a British publisher, but are probably valid for many other nationalities.
What Amazon requires from you is a Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, otherwise known as a W-8BEN. This is a four-part form that enables you to take advantage of a tax treaty that exists between the UK and the US which allows Amazon to release the full value of your royalties, with nothing withheld for tax purposes, on the basis that you will be declaring it to the UK authorities. Note that this applies to all royalties, regardless of the country in which the sale occurred. Continue reading
Anyone who has wandered into a Waterstones bookstore recently will have noticed a display of Amazon Kindle ebook readers, apparently for sale at the same prices as those displayed on the Amazon Web site itself. More recently you would also have noticed prominent signs encouraging you to connect your Kindle to the free in-store WiFi, from which you could presumably buy any book you fancy directly from Amazon. So why is Waterstones doing this?
James Daunt, MD of Waterstones, announced a deal with Amazon back in May 2012, but was reticent to discuss the “commercial details of the partnership.” Howevere his response to the accusation that he had signed the company’s death warrant was: “Do I look like a total moron? Because what you’re describing is the behaviour of a total moron.” (BBC News)
So there is definitely more to the arrangement than meets the eye. What I have heard from private inquiries is that a substantial chunk of the proceeds of a purchase made from a Kindle through the in-store WiFi go to Waterstones, rather than Amazon. In return Waterstones makes no profit on the devices themselves, which is why they match Amazon prices.
Waterstones press office still refused to disclose details of the deal when I spoke to them this morning, but they did not deny this was the case, and indeed confirmed they had heard the rumour before. If it is the case then I assume the details are being kept quiet to prevent unrest from competitors. There will also be technical changes that need to be tested. However such a deal would allow traditional bookstores to participate in the ebook boom, which can only be a good thing.