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I wonder whether there are any peeps out there who have published through Amazon's Kindle facility only to discover that because they are British citizens, they have become subject to a 30% withholding of royalties because of American tax laws - the bastards!
Yes you can be reimbursed, but not before you jump through hoops and pay some exorbitant amount to legal notaries in order to prove that you're not some tax-dodging Yank out to save the few measly bucks you've made from selling your e-book on-line.
I have been waiting for ages to make enough in sales to actually receive some money for the book I published and whilst I'm extremely grateful to all of you people out there that bought my book, I still haven't received a penny from sales, as because of the withholding of that 30%, the money I should have received in royalties still isn't enough.
In short Amazon is required by law to remove 30% of your royalties and send it directly to the US government - whether you like it or not, which is one third of your already meagre 35%. This means you're actually only getting 24.5% in royalties unless you can prove you're not American and that your country has a tax treaty with the USA.
All this is in the extremely small print, but is not made plain in the payment of royalties section of the Kindle pitfall and pratfalls section.
It's made me think about removing my book from Kindle's virtual shelves and start my own publishing site where British authors can add their e-books and get their payments without all that shit. Obviously, it would mean by-passing Amazon and all the other American-based sites for self-publication, but at the same time, it would mean that the royalty percentages could be substantially greater (probably up to 80%) and there'd be none of those flaming hoops to jump through, especially if like me, you don't sell that many copies of your book to make it worthwhile spending your hard-earned to stop those thieving IRS bastards getting their hands on money they have no right to.
Any thoughts?
Comments
I'm not surprised
Somehow, I'm not surprised by this. I am surprised that if you publish by going through amazon.co.uk they don't take the opposite view: that you're a UK citizen and therefore withhold 20% income tax instead.
If you decide to do a UK thing you're going to have to somehow manage a whole lot of business functions: hosting a website, for example, and paying for bandwidth. Running a merchant site, accounting for VAT and paying the authors. Accepting credit card and/or Paypal payments. Not to mention, I expect, making a limited company to run it all under (for tax purposes, of course). Of course there will be no stock to shift, I hear electrons weigh next to nothing.
Nothing is impossible, of course. I have some small experience in the business world, if I can help give me a PM.
Penny
Not surprised, Penny. Neither am I.
Yes there would be a lot to do, but if the turnover is less that about £35K, VAT doesn't come into it. I think VAT would have to be charged on the sales, though having said that, it would all be part of the price anyway.
Hosting the website and paying for bandwidth is no biggy, I have experience with that side of things and the e-commerce is no real issue either, however I am very glad that the stock weighs next to nothing as I'm no spring chicken anymore and humping around gert-great boxes of books would not be favourite.
I will be sure to take you up on your kind offer should the opportunity present itself.
Thanks Penny.
I ran across...
I ran across this site a few weeks ago... You might find it interesting...
http://www.purpledistinctions.com/
Annette
Thanks for that, Annette
That gives me a really good idea about pricing, but at the moment the entire thing is simply an idea and no more. There are people out there who are already doing this kind of thing and they're offering publishing through existing websites like Amazon, iTunes etc, but I was figuring on being completely independent and providing something that was free to the user, rather than demanding money up front.
I thought that might appeal to British authors who were looking to have something published but don't have the money to invest in something like purple distinctions, nor the wherewithal to deal with the stupid US laws that apply to organisations such as Amazon.com (myspace and Smashwords as others that I know of) and other US-based companies that are bound by the US government rules.
It's not that I'm looking to take on the might of the big guns, not at all, but I am looking from the point of view of giving British authors a chance to earn money even if their books don't sell in the thousands.
Does the same
happen with Lulu?
Angharad
Lulu and sales
I'm honestly not sure. I imagine that Lulu is an American-based company, in which case, they are bound by the same rules as the others I've listed.
Ask Maddy Bell or Tanya Allan
about their sales and what they use for sites and how they sell their works :) I know both do pretty good.
Sephrena
Maddy and Tanya
I'll give them a shout.
Lulu
are very good on this stuff.
If you only sell through their site you get the full amount of 'Royalties' you've set up, paid monthly no matter the amount as long as its over 10usd.
However, if you sell through Amazon, B&N etc they do take the tax which as uk tax payers we are not subject to - its a bit like the extradition treaty - all in the US's favour, nigh on impossible for anyone else to be treated fairly! Net result is that you get different levels of royalty depending on which portal your book is sold. Lulu do send out an annual tax statement so you can see how much the US Treasury has skanked you for.
My biggest selling volume has sold @ 160 copies - in 8 years! I certainly won't be retiring on the proceeds any time soon. To put that in context i've heard that the Cherie Blair biography only sold about 40 copies before it was remaindered! That said i've yet to find a better way of publishing that doesn't involve huge expense on my part - most set ups are purely printers out to make a quick buck from desperate to publish individuals. My cousin had a book published through a 'proper' house, he's had under £100 in royalties over five years as the deal is all about the publisher making money, not the writer.
I'd certainly be interested in a UK/European based publishing house as an alternative.
Madeline Anafrid Bell
Britain's answer to Lulu
Well, it's tempting me more and more to go ahead with this and I'm hoping that others like yourself would be game to give it a shot. Since the site would be truly international, there's no reason why it can't be open to everyone.
Of course, I'm not anticipating a huge response and therefore those who published through my site would be at the mercy of my skills as an SEOa - at least initially. Having said that, I get thousands of hits a month on my current site, which sells nothing - other than having a link to my book on three Amazon sites, so I do see plenty of potential.
There are various legalities I would need to trawl through, which I'm not looking forward to, like VAT, ISBN's, copyright and taxes etc, but basically, I think most of those should be the responsibility of the authors. Nevertheless, the idea is growing and I have another trick up my sleeve, which may be beneficial, so we'll see what happens there too.
It will be a lot of work, but who knows, it may well be worth it.
Thank you for your input.
Nick
Traffic...
What Amazon (in its various nationalities) does is to supply loads of potential customers, millions of them, if one works the tags right, and has an attractive book with a really good blurb. With electronic "stock," all that really matters is how *many* virtual books you sell, not how much you get. I have, for example, two books on Amazon, one of which costs exactly one US Dollar. The other costs just a penny less than ten US Dollars. Guess which one consistently brings in the most at the end of the month? And by "most," I should say from eighty to a hundred times more.
I've heard rumours that one of the most popular authors on Amazon is a fellow who churns out humourous "pot-boilers," one or two or three a month, and he makes a *tonne* of money at it, pricing them all at one US Dollar.
-
Cheers,
Puddin'
A tender heart is an asset to an editor: it helps us be ruthless in a tactful way.
--- The Chicago Manual of Style
Hey Puddin'
What you say may well be true, but for those outside the US, the US tax laws make it very difficult and whether you're on 35% or 70% royalties, you're still subject to the 30% withholding amount. Indeed, there are many disgruntled authors who feel that Amazon's royalties are far lower than they should be and their payments are often late by months, even though they suggest that payment will be made sixty days following the month when the lower limit was achieved.
I'm just looking at providing an alternative.
Nick B, British on-line e-pub
Nick B, British on-line e-pub site Lulu sells books by British authors. I may pay shipping and handling, but they are not taxed by the U.S.
May Your Light Forever Shine
Lulu and taxes
Lulu is not a British company as far as I can tell and they state in their terms and conditions that for people outside of the US, any withholding percentage that the IRS may demand will be deducted, which may make the creator's royalty amounts less than stated (by 30%)
Sorry.
Been there, jumped though hoops and now get full amount
This is not unusual... many of the US ePub sites do this, including Smashwords. It's not actually Amazon's fault... the IRS are a mean and hungry beast. When you consider how much the presidential elections cost, it's hardly surprising.
To be fair, the hoops aren't too bad.: -
All you have to do is complete a form and send it (With passport and supporting documents) to the IRS at the US Embassy in London.
They send you the tax exempt (ITIN) form in return. You then send another form to Amazon, quoting the relevant ITIN number...job done.
However, this only exempts you from US tax, not for the rest of the .com world, like India etc.
#Once you have the ITIN form, you can log it with other ePub companies, like Smashwords.
The UK Inland Revenue, however, treat us differently. They wait for you to declare income and then tax you on it. If they check and you've fibbed, then they whack you with a huge bill and fine. You have to declare US income, and even if the US have taxed it at source, they tax you again.
Hope this helps.
Tanya
There's no such thing as bad weather, just the wrong clothes!
The IRS...
That's Infernal Revenue Service taxes US residents on income earned overseas too... (Or tries to. I guess if you're rich enough you can get away without paying. But, I'm not even within digits of that level of income...)
Your info on getting the ITIN for UK authors will probably help many over there - where Amazon is concerned.
Annette
Thank you Tanya
This is why I wanted to start a publishing house over here. That way we wouldn't need to go through that for all the different countries in the world, they could buy from my site instead. This way the authors could be paid their royalties and sort the tax out themselves - which they'd have to do in this country anyway.
any information you get
please pm me the links so that i can add it to the writers resource page ^^
Interesting..
I want in if you're starting a UK ePub house, as it might assist in UK & Europe circulation. Let me know of developments. I have sold over 10,600 books on Amazon Kindle... one third to the UK...the rest to .com markets.
Tanya
There's no such thing as bad weather, just the wrong clothes!
UK ePub house
I'm most certainly looking into the logistics of such a venture and at the moment it's looking promising. I'll definitely be keeping you posted.
Inland Revenue
Or, as is it is more properly known these days, "Her Majesty's Revenue and Customs", do as you say above, but only if you are employed by somebody.
If you are self-employed, as I was 1996-2006, they use an arcane system whereby they charge you next year based on what you earned the year before last... guess how well that works out in the majority of cases.
It is an absolutely barmy system and I never found a way round it. Yes, you can get a refund eventually if your earnings take a dive but that's no use paying bills, is it?
In this particular scenario the author could be considered to be self-employed whatever he/she is doing elsewhere for work. There might be a low-earnings threshold, but I'm not holding my breath.
Penny
Tax tax and more tax
I am self employed, so I have to pay last year's tax, as well as next year's tax (or this current year) up front. Supposedly, it allows me a break once I get along the system, as I only pay in advance for he year we are in. I agree, it is a completely loopy system, but then they want my money so they can release terrorists and give them homes and welfare.
Tanya
There's no such thing as bad weather, just the wrong clothes!