Back in the summer I decided that I really needed to sort out my tax status on the kindle publishing platform. Why? Well my kindle book sales were increasing and I was beginning to realise that paying 30% tax on my royalties was starting to build up!
Initially it hadn’t bothered me because I was only selling a few books every now and then but as I have increased the number of books published and in particular after book number 4 (I don’t know if that is a special number or not!) I saw a big increase in overall sales.
Therefore I became more aware of the impact of only receiving 70% of my royalties as they came in each month. Since I live in the UK I have to pay 30% tax on all my royalties unless I submit an identification number to prove I live in a country that has a treaty with the US and therefore don’t have to pay any tax! (That’s the agreement for the UK – it will be different depending on the country you live in).
It then occurred to me that not only was I paying 30% tax to the US, I was also declaring that income in the UK and therefore being taxed on it again! All of this was becoming ‘taxing’ if you’ll excuse the awful pun there! 🙂
So I was looking to see how you go about getting this special identification number which is called an ITIN or EIN number. At first it seemed you could fill out an online form and submit it to obtain this number but that functionality was removed for people living outside of the US!
Basically I needed to telephone a US number and speak to someone and get it that way. Of course calling the US would be expensive and I had no idea of how long I might be on the phone! So I procrastinated… until last week!
It Has Now Changed – Yeah!
Last Wednesday I had decided to set up a Skype call as it would be less expensive, and get this tax number. I had printed out the form and filled it in so that I knew exactly what the answers should be to save time!
I then visited the original website I had used to understand what I needed to do for last minute tips on how to go about it – thank you to Catherine Howard by the way! I discovered that it has changed and is now really easy!
I don’t remember seeing any email from kindle publishing with this extremely useful and relevant information! If you live in the UK you can now just use your NI (national insurance) number!
So I logged into my kindle publishing account and clicked on the Update Tax Information tab and added my NI number where I needed to. Clicked to save, print and then finish and here it is – the proof 0%:
This is what it says on Amazon KDP:
“If you are claiming a reduced rate of withholding tax under an income tax treaty and do not have a U.S. TIN, provide your foreign (non-U.S.) income tax identification number to receive treaty benefits. This number is issued by your local tax authority or government for income tax purposes.”
So there you have it. If you haven’t sorted this out for yourself yet then you now can – quickly and easily!
I am just setting up my account and after I read all the comments which I want to thank you for answering as I received so good info, I am still wondering about the tax. I am not a sole trader so I use the account as “individual” using my NI and not a UTR number. The question is: do I have to close each financial year as a sole trader would do or I don’t have to worry about this? What is the procedure.
I am a sole trader and use my NI number as an individual. Its best to keep everything above board and therefore informing HMRC about additional income and potential tax is recommended.
Interesting blog, thanks for highlighting that information.
My withholding rate is automatically at 0% for all US payments (as opposed to other countries which may be higher than 0%?), without me having provided my NI no., which is very confusing.
My books have started off well, but I haven’t been paid yet so I haven’t seen the actual tax result.
When it asked if I’m a US citizen I said yes because I am (dual) and I supplied my social security no. where asked, and I also supplied my address which is is the UK.
Do you have any idea how or why they’ve put my tax at (apparently) 0% without me having to provide any proof whatsoever of my UK residency? The only thing I can think of is that the IRS already have that information stored under my social security no. Seems too good to be true, so I’m a little worried about what I’m going to see when I get my first payment!
Ultimately, is the 0% all you need to see to be sure? I don’t want to enter my NI no. and break what isn’t broken!
I really don’t know why it has automatically come up with 0% tax. If you have filled the form out correctly then perhaps the information was available via your social security number. Sorry I can’t help further.
Hi again Kay,
Another question. I have updated my tax information as per your instructions, submitted and the the info has been accepted BUT how soon does KDP act on the info sent? They are notoriously slow in making any changes…. Is there a means of contact?
You might not be able to get it sorted for this tax year – yes they are slow! You can contact them by signing into your account and going to the help link. Scroll to the bottom of the page and on the left you’ll see a contact us button. Click on the Account, taxes and getting started section, then click tax oinformation and you’ll be able to email, chat or phone them. Hope you get it sorted.
I found this blog really helpful Thank you. Tax info updated today as I am a UK citizen BUT I have been receiving reduced royalties from KDP since publishing my book in June 2019…. How do I go about getting that money back?
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not sure if this blog is still active but it is the only blog I can find that is dealing with the KDP and tax problem in the UK. It seemed that Amazon have changed the form again and making it more confusing how to complete the last stage, Limitation on Benefits (LOB). There are so many different criterias and I do not know which one I belong to since the UK has moved out of the EEA and EU. I set up a company, specifically for KDP to get the NI, and I am unsure if which of the sections to complete. Can some one help. It is between Article 23(5) and Company that meets the derivative benefit test. It is unlikely the latter because we are no longer part of the EU or EEA. Can someone explain because I am on this last hurdle. Thank you
I think the form you are using is different to the one I use because I assume you are a business rather than an individual. I’m sorry I can’t help you with this. Perhaps it’s worth phoning or emailing amazon help to see if someone can help you. Or look on the KDP community forum posts. Here’s an interesting thread – https://www.kdpcommunity.com/s/question/0D52T00004v4R9u/create-account-as-individual-or-limited-company?language=en_US
Hope you can get this last but sorted.
Hello, since I lost my job due to covid, I have been on benifts and still on benifts… I was wondering if I put my national insurance number into the kdp tax information… Would it affect my benefits? Before I make sales and after I make a few sales? Hope you can help me with that… Thank you for your time 🙂
I can’t think of a reason why it would but I’m only guessing. If you start earning lots 🙂 then it probably would affect your benefits but you would need to declare that anyway.
Oh, you were a much sought-after blessing today! <3
I stopped questioning it was that simple and just did it (I'm a newbie to KDP etc).
NI number did the trick
Thank you Thank you Thank you
Yes I didn’t realise it could be that simple either!
Thanks for the useful information that you have provided. I published my book in August 2020 and completed the ‘tax interview’ via KDP – I also have an ‘applicable holding rate of 0.0%. Still, being a UK tax payer, am I right to assume I still need to declare my KDP earnings to HMRC at the end of the financial year?
Yes you still need to declare your KDP earnings.
Hi Kay, I dont see the “NI” on my tax page, its still asking for a “TIN” a tax payer identification number. Do I just insert my NI instead? This is on the tax interview page.
Yes just put your NI in there and it will accept it.
If you want to publish through your own private limited business, how would you do so? What options would you select for the type of beneficiary owner?
I’m a sole trader so I don’t know much about private limited companies. Perhaps this might help you: https://uk.practicallaw.thomsonreuters.com/8-519-9398?transitionType=Default&contextData=%28sc.Default%29
As a sole trader, which option do we choose when selecting the ‘Type of beneficial owner’?
I put individual for that.
Kay. (Belated) thanks for this article.
A few years ago, I published a book on Creatspace as a test of the process, but never updated (or entered?) tax details. As I’m now preparing to set up with Ingram Spark I was looking into this issue again because I anticipate being ask for a code.
I have one query if you don’t mind. In answer to providing my “foreign income tax identification number’ I would first have used my UTR (Unique tax reference) rather than NI number. Is the UTR accepted as an alternative, do you know?
I’m sorry I don’t know the answer to your question. I’ve always used my NI number. If you find out then perhaps you could update your comment. Thanks
I am currently in full-time employment and have a book i wish to publish on KDP!
I am not registered as self-employed because I am in full-time employment…do you know if i need to register as Self-Employed as well before I publish my book?
This is all a little confusing so i want to get it right! Thanks in advance. Jamie
Here are some helpful sites for you:
If you start earning money with your kindle book then you would need to declare it for tax purposes and I assume then you would have to tell HMRC that you are also self-employed. If it were me (this is not legal advice of course) then I would wait to see what happens with my book before doing anything. Good luck!
Thank you so much for your reply – most helpful!
All the best
I am full-time employed – should I join this business as a sole trader or with an .ltd? Asking to understand how to deduct potential costs coming from running the business.
It is up to you if you run as a sole trader or LTD. Here are a couple of good articles to read to help you understand the differences between them:
If you want to get up and running quickly then sole trader is easiest. Just make sure you get some type of indemnity insurance if you choose sole trader because you will have to absorb any financial losses personally rather than being able to file them against a LTD company.
thank you for your response. Just to clarify, I was asking my question specifically referring to the Amazon selfpublishing business that, from my understanding, just implies that we get paid through royalties on top of which we obviously have some costs for production.
Thank you very much.
Yes that’s what I thought. If you’re already employed then any royalties will need to be taken into account to update your tax code. I’m not sure how that would work but it probably means doing some form of online tax self assessment.
Thank you for that. Does that mean that tax will be paid automatically and there is no need to do a self assessment? Even if we have income from other sources? (income that is already taxed)
It means that since USA has an agreement with UK, there is no USA tax to pay. However, all income where ever it’s from should still be declared when you fill out your self assessment for the year.
So, I am a resident of the UK and I have a National Insurance Number, but I haven’t self published any books with Amazon yet. Could I apply using my NI number because it sounds like you have to supply your NI as a second option after giving them the Tax identification Number
Yes, you can use your NI number.
Thank you so much, Kay!This has saved me an enormous amount of time and grief. Really appreciated. NI number accepted immediately
Kay, shouldn’t this be your tax number, as supplied on self-assesment materials/letters from HMRC, rather than your NI number?
That’s what I used for the ‘interview’ for amazon affiliates.
No, its your NI number.
I’ve been checking. Apparently HMRC does use two different numbers in its communications with you, and TINs are used to try and unify international tax tracking. According to the EU, we don’t have a single TIN, the way some countries do, but they list both, which suggests either could be used.
HMRC have this.
The key is at the end of the page: “For most individuals in the UK the TIN will be their National Insurance Number.”
That may be a better reference, if you hit an awkward official, than Kay’s experience, or yours. But not everybody has an NI number. Most of the rest of Europe has a simpler official ID system than we have here, no need for fussing with finding a recent utility bill.
Thanks for adding that Dave.
Thank you for your help for this tax interview. Hopefully no tax will be upheld.
God bless you.
What can we do about claiming back ALL the 30% tax witheld from previous years with Amazon? They will only give tax information for 2 years and I have been publishing books on KDP for 7.
I’m not sure if you can claim the tax back. I suggest taking your end of year tax reports from Amazon to your local tax office to find out.
I am a new visitor to your website. I love your site. You seem like such an awesome person. do you do any one-on-one coaching? Thank you so much for all the valuable information you provide.
Hi, I no longer offer coaching but I do provide consultations if you’re interested. Just email me and I’ll let you know the details.
Thank You, Kay! Even though I’d done new tax interview, 30% was still being withheld.
Decided to try once again after reading this post..re-submitted my country tax ID number… did before but saw NO sign of it awhile ago.. and it was reduced to 10%. Turns out that the right percentage for Jamaica. 😉
Thank You SOOOO MUCH!
That’s great Angela! Thank you for letting me know. 🙂