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