Post by Lily on Jul 16, 2012 14:55:46 GMT -5
Smashwords is the only publisher I know that insists on this. The instructions are so complex you need an accountant. The only alternative is to let Smashwords deduct 30% of your royalties, on top of the percentage they already take. 
"US Residents: You must provide your SSN or EIN in the form below, along with proper postal mailing address, in order to avoid the IRS-required 28% witholding rate. If you don't provide this information, we cannot pay you. If you provide an incorrect tax ID, it may prevent payment. If your name below doesn't match the name on file with the IRS associated with your SSN/EIN, it may prevent payment. Your SSN/EIN is stored encrypted, and the web connection when you transmit your SSN/EIN is also encrypted. In other words, your personal tax ID information is very safe. For your further security, after you send us your SSN/EIN we will not display it on this page.
Non-US Residents: If you live in a country with a tax treaty with the US, you may be eligible for reduced tax withholdings if you mail a completed W8-BEN form to Smashwords. The form must include a United States IRS-issued ITIN/EIN/SSN. Click the link below for Deferred payment and it will cause additional IRS links to appear where you'll find additional instructions. If you do not have an ITIN/EIN, you will need to fill out an IRS form W-7, for which you'll need a letter from Smashwords to accompany your application to the IRS. Once your accrued sales balance exceeds $10.00, you can request the letter from Smashwords at the link below (click the Defer button and it will appear). For full instructions, as well as a helpful checklist of how to obtain an ITIN, click here for our ITIN FAQ.
Are there tax withholdings on my earnings if I reside outside the United States?
If you reside outside the US, your Smashwords earnings are subject to a 30% tax withholding, mandated by the United States Internal Revenue Service (IRS). Luckily, most Smashwords authors reside in countries that have special tax treaties with the US, and these tax treaties can allow you to claim full or partial exemptions from tax withholding, depending on the country. To view countries with tax treaties, see this pages 36 and 37 of this PDF file: Here are some of the withholding rates for some of the most common countries representing Smashwords authors: Canada - 0%; United Kingdom - 0%; Canada - 0%; Australia - 5%; New Zealand - 10%; India - 15%; South Africa - 0%;Germany - 0%. Be sure to check the list above, because these rates are subject to change by the IRS.
To guarantee you qualify to receive the full or partial exemption from tax withholding, you should submit a signed IRS form, W8-BEN, to Smashwords. The completed form must include a U.S. IRS-issued tax identification number - either an ITIN, SSN or EIN. If you are a U.S. citizen living abroad, you can send us a completed W-9 form with your SSN to the postal mailing address listed below in the Tax
Treaty Checklist.
Most authors and publishers don't have one of the above IRS-issued tax identification numbers. so they must apply for one from the IRS. When you apply for an ITIN or EIN, the IRS requires you also provide a hand-signed letter from Smashwords, written on Smashwords letterhead, stating your reason for requesting an ITIN. To obtain the letter from Smashwords, you must first have a $10 accrued balance. After you earn your first $10, click to your Payee Profile where you'll see the link to request your letter. Please DO NOT request it via the customer support link. Allow 4-6 weeks for Smashwords to supply you the letter.
After you receive the letter, go to irs.gov and fill out the W-7 form. Here's a link to the form (opens a PDF file): Here's information on how to fill it out: Here's a link to the tax treaty articles, where you can find your country and cite the article number in our W-7 form (opens a PDF):
Sorry, the IRS rules are confusing and Smashwords cannot counsel you on how to fill out the form. Please speak with your accountant, or direct form-related questions to the IRS's online support forum. Here's a summary of links for how to contact the IRS: The IRS cautions it can take up to 6 weeks for them to process your application, so please apply now.
Once you receive your ITIN, go to your Payee Profile at Smashwords - - where you will find instructions on how to send us the completed W8-BEN form, which you can also find here: You'll find form-filling instructions here:
REMEMBER: Your W8-BEN form must include your ITIN, otherwise Smashwords cannot accept it.
CHECKLIST: HOW TO OBTAIN YOUR TAX TREATY BENEFIT:
1. Once you have $10 accrued in your account, from your Payee page (under the Account tab) you'll request a letter from us, which we snail mail you. Only request the letter from the form on the Payee page (not the customer support form).
2. After you receive our letter, you include that with a form W-7 application that you submit to the IRS (see links above)
3. Once they assign you an ITIN (or possibly an EIN if you're a company), you complete the form W8-BEN (see above for link) and snail mail us a signed copy to: Smashwords, Inc. Tax Compliance Dept. 15951 Los Gatos Blvd., Ste 16 Los Gatos, CA 95032 USA. You'll also find this postal mailing address in your Payee page. Please write your Smashwords username (screen name) on your form. After we receive it, the IRS allows us to give you the tax treaty benefit.
4. While you wait for all the above, you can set your payment preference in your Payee page to "deferred" so we don't pay you until after you're able to receive the tax treaty benefit of reduced or eliminated withholdings."
"US Residents: You must provide your SSN or EIN in the form below, along with proper postal mailing address, in order to avoid the IRS-required 28% witholding rate. If you don't provide this information, we cannot pay you. If you provide an incorrect tax ID, it may prevent payment. If your name below doesn't match the name on file with the IRS associated with your SSN/EIN, it may prevent payment. Your SSN/EIN is stored encrypted, and the web connection when you transmit your SSN/EIN is also encrypted. In other words, your personal tax ID information is very safe. For your further security, after you send us your SSN/EIN we will not display it on this page.
Non-US Residents: If you live in a country with a tax treaty with the US, you may be eligible for reduced tax withholdings if you mail a completed W8-BEN form to Smashwords. The form must include a United States IRS-issued ITIN/EIN/SSN. Click the link below for Deferred payment and it will cause additional IRS links to appear where you'll find additional instructions. If you do not have an ITIN/EIN, you will need to fill out an IRS form W-7, for which you'll need a letter from Smashwords to accompany your application to the IRS. Once your accrued sales balance exceeds $10.00, you can request the letter from Smashwords at the link below (click the Defer button and it will appear). For full instructions, as well as a helpful checklist of how to obtain an ITIN, click here for our ITIN FAQ.
Are there tax withholdings on my earnings if I reside outside the United States?
If you reside outside the US, your Smashwords earnings are subject to a 30% tax withholding, mandated by the United States Internal Revenue Service (IRS). Luckily, most Smashwords authors reside in countries that have special tax treaties with the US, and these tax treaties can allow you to claim full or partial exemptions from tax withholding, depending on the country. To view countries with tax treaties, see this pages 36 and 37 of this PDF file: Here are some of the withholding rates for some of the most common countries representing Smashwords authors: Canada - 0%; United Kingdom - 0%; Canada - 0%; Australia - 5%; New Zealand - 10%; India - 15%; South Africa - 0%;Germany - 0%. Be sure to check the list above, because these rates are subject to change by the IRS.
To guarantee you qualify to receive the full or partial exemption from tax withholding, you should submit a signed IRS form, W8-BEN, to Smashwords. The completed form must include a U.S. IRS-issued tax identification number - either an ITIN, SSN or EIN. If you are a U.S. citizen living abroad, you can send us a completed W-9 form with your SSN to the postal mailing address listed below in the Tax
Treaty Checklist.
Most authors and publishers don't have one of the above IRS-issued tax identification numbers. so they must apply for one from the IRS. When you apply for an ITIN or EIN, the IRS requires you also provide a hand-signed letter from Smashwords, written on Smashwords letterhead, stating your reason for requesting an ITIN. To obtain the letter from Smashwords, you must first have a $10 accrued balance. After you earn your first $10, click to your Payee Profile where you'll see the link to request your letter. Please DO NOT request it via the customer support link. Allow 4-6 weeks for Smashwords to supply you the letter.
After you receive the letter, go to irs.gov and fill out the W-7 form. Here's a link to the form (opens a PDF file): Here's information on how to fill it out: Here's a link to the tax treaty articles, where you can find your country and cite the article number in our W-7 form (opens a PDF):
Sorry, the IRS rules are confusing and Smashwords cannot counsel you on how to fill out the form. Please speak with your accountant, or direct form-related questions to the IRS's online support forum. Here's a summary of links for how to contact the IRS: The IRS cautions it can take up to 6 weeks for them to process your application, so please apply now.
Once you receive your ITIN, go to your Payee Profile at Smashwords - - where you will find instructions on how to send us the completed W8-BEN form, which you can also find here: You'll find form-filling instructions here:
REMEMBER: Your W8-BEN form must include your ITIN, otherwise Smashwords cannot accept it.
CHECKLIST: HOW TO OBTAIN YOUR TAX TREATY BENEFIT:
1. Once you have $10 accrued in your account, from your Payee page (under the Account tab) you'll request a letter from us, which we snail mail you. Only request the letter from the form on the Payee page (not the customer support form).
2. After you receive our letter, you include that with a form W-7 application that you submit to the IRS (see links above)
3. Once they assign you an ITIN (or possibly an EIN if you're a company), you complete the form W8-BEN (see above for link) and snail mail us a signed copy to: Smashwords, Inc. Tax Compliance Dept. 15951 Los Gatos Blvd., Ste 16 Los Gatos, CA 95032 USA. You'll also find this postal mailing address in your Payee page. Please write your Smashwords username (screen name) on your form. After we receive it, the IRS allows us to give you the tax treaty benefit.
4. While you wait for all the above, you can set your payment preference in your Payee page to "deferred" so we don't pay you until after you're able to receive the tax treaty benefit of reduced or eliminated withholdings."
As I said before, you'd really need an accountant to figure all this out. I really don't have a clue what they mean, and furthermore don't want to. The upshot is, I might as well just remove the few books I have with Smashwords. They're already at Kindle anyway. Because (a) I have no intention of letting Smashwords keep 30% of my royalties. But (b) I'm not going to start hassling around with W8BEN forms, etc.(whatever they are) either. No way. I'm disappointed though, because I like Smashwords. And if they ever get rid of this 30% albatross, I'd be back like a shot.