This blog post was featured in Carnival of the Indies, issue 19.
Note: this post is specifically aimed at UK authors, but some of it may apply to authors in other countries. I am not a lawyer or a tax advisor. This post reflects my own experiences – it is not professional advice.
If you’re a UK author like me, chances are you sell books via US companies like Smashwords and Amazon. These companies are obliged by the US Internal Revenue Service (IRS) to deduct 30% tax from your earnings. However, the UK has a treaty with the US that means UK citizens don’t have to pay tax to the IRS (you still have to pay tax to HM Revenue & Customs, of course).
To take advantage of this, you need an IRS-issued tax identification number (ITIN). Getting one is quite a convoluted process, so this post is intended to help you get your own ITIN with a minimum of difficulty.
The steps are as follows:
- Get a letter from a US company stating that you will be receiving royalties from them
- Fill in a form W-7
- Send form W-7 and proof of identity to the IRS
- Fill in and send form W-8BEN to each company that you receive royalties from
That sounds simple, but I’ve read some horror stories about how pedantic the IRS can be. It’s worth bearing in mind that the IRS have a vested interest in rejecting your application, since approving it means that they don’t get your tax money. Take care when filling in your application, and make sure you read all the documentation (and this post) carefully.
Get a Letter
According to the IRS’s instructions for filling in form W-7, you need “A signed letter or document from the withholding agent, on official letterhead, showing your name and evidencing that an ITIN is required to make distributions to you during the current tax year that are subject to IRS information reporting or federal tax withholding“.
To get this letter from Smashwords, you must have accrued at least $10 in royalties. Once you have, you can go to your payee information page, then click the “Request a letter for your W-7″ link to request that they send you a letter by post. It should arrive within four weeks.
Amazon offer a PDF that you can download, fill in and print. I was a little suspicious of that, since the signature has been scanned. This is what I used, however, so it would appear to be good enough. The Tax Information for Non-US Publishers help page in Kindle Direct Publishing has a link to the PDF. Open the PDF, fill in the name and date fields, then print it.
At this point, it is also a good idea to select the “Defer Payment” option on the Smashwords payee information page. When your ITIN is on file, you can select “Pay Me Now” to get your royalties, without the 30% tax deduction.
Fill in Form W-7
The Taxpayer Identification Numbers (TIN) page on the IRS website has a link to a downloadable PDF of the W-7 form, and links to more information. The W-7 PDF can be completed on your computer or by hand. I filled it in on my computer, partly so that I could keep a copy, partly to avoid any issues caused by illegible handwriting.
I read somewhere that you must use blue ink to fill in the W-7, or it will be rejected. If you fill it in on your computer and print it, make sure you use a colour printer so that the parts you have filled in are printed in blue. Also make sure that you don’t use abbreviations (eg enter your country name as “United Kingdom”, not “UK”)
In the “Reason you are submitting Form W-7″, tick boxes a and h. In the Other box, enter “exception 1d royalties”, and enter your country and treaty article number (12 for the UK). See the image below:

Reason you are submitting Form W-7: Click to see full size version
Note that dates must be entered in US format (Month/Day/Year), not Day/Month/Year. In section 6b (Foreign tax I.D. number), enter your national insurance number. In the phone number section, it’s not entirely clear what format it should be given in. I wrote “+44″ in the brackets, then the area code (without the leading 0) and number in the rest of the space. It wouldn’t let me fill it all in on the computer, though, so I had to write it in by hand.
Send Form W-7 to the IRS
You need to send the W-7 form, the letter from Amazon/CreateSpace/Smashwords, and proof of identity to the IRS. I used my passport as proof of ID. Other documents are accepted, but you’ll need two documents if you don’t use your passport. See the IRS documentation for details of what is accepted. It’s a good idea to keep a copy of the letter and the completed form, so that you know exactly what you sent to them should there be any queries.
The IRS will accept a notarised copy of your passport, but it has to be notarised by an officer of the IRS. Luckily, there is an IRS office in the London Embassy. You can visit them in person or post it to them with a covering letter. If you call in person, check the opening times on the website before travel. If you post your passport, post it by Special Delivery. The IRS in London will check your application and let you know if there are any mistakes, then send it on to the IRS in the US if all is well. I got my passport back within a week, and my ITIN letter after about two months.
Fill in and Post form W-8BEN
Fill in a separate form W-8BEN for each company that you deal with. Make sure that you follow the instructions (PDF version). As an individual, you should put “N/A” in line 2 (Country of incorporation or organization). Put your ITIN in line 6 (U.S. taxpayer identification number), and your national insurance number in line 7 (Foreign tax identifying number).
Smashwords ask that you put your Smashwords username (screen name) on the form – put this in line 8 (Reference number(s)).
In line 9, tick boxes a and b and enter “United Kingdom” for the country in part a.
Sign and date in part IV. Enter “Self” under “Capacity in which acting”. Finally, send the form to the US companies that you deal with.
Add Your ITIN to Your Smashwords Payee Information
Go to your Smashwords payee information page, and go to section 3 (Tax Identification). Enter your ITIN in the relevant box, select the “Pay Me Now” option, and click Save. When you next go to that page, the ITIN will not be displayed, but you will see a “Your tax ID is on file” notice to the side of the ITIN box.
Once the W-8BEN form has been processed by Smashwords (this is normally done at the end of the month), your payee information page will have a notice at the top, similar to this one:

Smashwords W-8 Received Notice
Get Paid
Everything should now be set up for you to be paid your full royalties, without a 30% deduction. I found the process convoluted, but didn’t have any problems. If you do have problems, the links below may help.
Useful Links