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30% Withholding Tax

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In this section you will learn about the the 30% US Withholding Tax, and how Australian Self-Publishers can get the tax reduced to 5%.

30% Withholding Tax

All authors who sell their books on Amazon.com are subject to a 30% Withholding Tax. This tax is automatically deducted from their earnings by Amazon.

Authors living in countries that have a Trade Treaty with the US, such as Australia, can apply for an exemption that reduces the tax to 5%.

If you are eligible for this exemption, KDP will send you an email explaining about the Withholding Tax. At the end of the email there will be a link to a page where you will be able to complete the tax exemption forms.

Requirements

Australian authors will need an Australian Tax File number.

On the tax exemption page, you will be asked to consent to filling in the form electronically.

You will also be asked to consent to providing an electronic signature for Form W-9. The electronic signature does not require any arcane graphical knowledge. You simply type your name and then click a button that confirms you are who you say you are.

Filling in the forms

A few things to remember about these forms:

  • You are completing the W-9 form as an individual so you can leave questions relating to businesses blank.
  • ‘Beneficial Owner’ refers to you as the owner of the work.
  • When you are asked if you have a TIN, answer yes as this is your Australian Tax File number.
  • You will be asked to type your ‘Australian TIN’ in the box provided. Type your Tax File Number exactly as it appears on your Tax File Number certificate.
  • For the US Persons Test, you should click the last entry which says ‘None of the above’.

Once these forms have been completed and submitted, Amazon can reduce your Withholding Tax to 5%.

In the next section we will look at purchasing an ISBN in Australia.

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