Today, I have mostly spent my day trying to sort out my tax exempt status for Smashwords where I recently put up Dead Heat. The UK is one of those countries to have a tax treaty with the USA – meaning self-published authors like myself can apply for tax exempt status from our American cousins and claim all of the cut from our sales. Hurrah!
But wait, as with anything where tax is concerned, it’s not that simple. It used to be that I could send some documents to the US Embassy in London and get my documents authorised, get my tax number and then send the details to Smashwords so they can remove the 30% cut of my royalties that would have been taken by the IRS.
Not any more.
The IRS closed the London office and there is nobody in my own country who can seemingly authorise any copies of my forms. What’s worse, it used to be that a “non resident alien” could apply over the phone for something called an EAN. This has been replaced too, meaning that the only option is to apply for a I/TIN. Here is what is a deal-breaker for me – it seems now I must send my passport to Texas to get it verified first hand so I can send my authorisation form (the new W8BEN) to Smashwords so they can supply to the IRS to remove the tax status. Of course, I am very concerned about sending my passport to a foreign country – let alone one so far away and let alone meaning it may be out of my hands for several months.
Or simply take my book down from Smashwords altogether because I never had this problem with KDP who had a simple online questionnaire to fill out the W8BEN. 48 hours later, I had my tax exempt status. Considering I intent to pursue small press initially for Salmonweird and use ebooks as a fall back if it doesn’t excite anyone, that might be the least anxious and stressful option – the other alternative is to resign myself to letting the IRS get their grubby little mitts on 30% of my paltry royalties.
Any other UK sellers had this issue with Smashwords? Please bear in mind these changes have been in force since the beginning of the year.