Recovering U.S. tax withheld at source

As a follow up to my previous post on the KDP/CreateSpace tax interview, I will now answer a question that often arises regarding one’s options for recovering U.S. tax withheld: Can I get any of it back, and if so, how? If you are a non-U.S. author who had tax withheld prior to sorting out your U.S. tax ID, you can apply to the IRS for recovery within three years of the date the tax return was originally due for the tax paid, plus any extensions you may be entitled Read More …

New tax rules for non-U.S. authors on KDP and CreateSpace

[UPDATE May 13, 2016: I’ve been receiving emails from authors who live in countries that do not have a tax treaty with the United States and who want to reduce the withholding tax on their royalties. This is not possible. If your country does not have a tax treaty with the U.S., then by default you forfeit 30% tax to the U.S. government on royalties earned on sales in the States. Your own country likely has a tax credit for taxes paid abroad; if so, you can claim your U.S. Read More …

Why Italy is charging higher VAT on ebooks without an ISBN

In their most recent email reminder regarding changes in VAT in the EU, Amazon added a footnote regarding Italy: that also of January 1st, Italy has implemented new legislation that charges a higher rate of VAT on ebooks that do not have an ISBN. eBooks that do not contain an ISBN are charged 22% VAT, while ebooks with an ISBN are charged a rate of only 4%. Before the indie forums light up with declarations that this is a war on ebooks and/or Amazon or Kobo (where ebooks can be Read More …

Understanding KDP’s new VAT-inclusive pricing, and how to work it to your advantage

Much confusion has reigned over Kindle Direct Publishing’s new VAT-inclusive pricing. Part of the problem lies with Amazon who, in an attempt to explain what an author’s pre-VAT royalty would look like, published a list of the new pricing bands with and without VAT. What this did was create worry that if a consumer from another EU country with a higher ebook VAT bought one’s ebook off, for example, the Amazon.fr site, and the price without VAT fell outside the minimum price to receive the 70% royalty, then the author Read More …

Changes to EU VAT affect all sellers, not just Amazon

In my previous post on the January 2105 changes to the VAT system in the EU, the focus is on Amazon since the VAT changes mean a change to Kindle Direct Publishing’s pricing system and royalty structure. However, authors need to be aware that these changes do not affect only Amazon, they affect all ebook sellers across the EU. Kobo’s system is currently VAT-inclusive for the EU, so authors will not see a change to Kobo’s system; however, authors will see a change to their royalty payments since VAT is Read More …

Changes to EU VAT lead to changes in Kindle contract

ATTENTION KDP authors: As was discussed in the third edition of The Global Indie Author, and in my recent public lectures, on January 1st the whole of the EU changes from a seller-based system to a consumer-based system with regards to VAT on ebooks, with what is known as the destination principle. The destination principle is intended to close the loophole whereby companies such as Amazon, Apple, Google, et cetera registered themselves in the EU in Luxembourg where VAT on ebooks is the lowest in the EU, at 3%. This Read More …

Amazon and Hachette settle their dispute – now what?

It was announced earlier this month that Hachette and Amazon have reached an agreement. The deal allows Hachette to set ebook prices, which means the deal is an agency deal. In the latest edition of The Global Indie Author, I speculated that Hachette and others would likely return to the distributor discount model. This deal proves me wrong. But what is interesting about the deal is that it hints at an outcome I didn’t see coming: Amazon accepting a lower commission. What came out in the United States vs Apple Read More …

KDP expands into The Netherlands

Amazon have opened Amazon.nl, expanding now into The Netherlands, and with that comes another KDP channel. The pricing band to receive the 70% royalty is the same for the rest of the Eurozone, namely between €2,60 and €9,70. According to the fall 2013 edition of Global eBook, the Dutch were slow to embrace the ebook format but things began to change in 2011. The momentum gained further traction in 2012 when Apple, Google, and Kobo launched localized platforms, with Kobo partnering with Dutch bookseller Libris BLZ. The market has shown Read More …

KDP Select ups the ante for authors’ exclusivity with All-Stars perk

Amazon have announced the continuation of KDP Select All-Stars, a perk for authors who enroll in KDP Select in the U.S., UK, and Germany: the chance to earn bonus cash if you or your book falls in the top 100 for the month of October. The top 10 most-read authors on Amazon.com will each be paid $25,000; the top 10 on Amazon.co.uk will receive £2,000; and the top 10 on Amazon.de will receive €3,000. In theory, an author can be top selling on all three sites, and be paid for Read More …