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Old 05-04-2010, 07:42 AM   #7
neilmarr
neilmarr
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Join Date: Apr 2009
Location: Monaco-Menton, France
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Hya MTM: I think you'll find that the UK has treaty status with the IRS which means you qualify for exemption from US tax. The problem is that you've got to jump through hoops like a performing circus poodle to establish this.

My own wee publishing house was UK-based for the first ten years but we re-registered in Canada earlier this year. And (though the timing is purely coincidental, I believe) that's when we first came across several US retailers -- Smashwords was by no means the first -- saying that they would have to withold 30% for the IRS until we'd completed all the paperwork necessary for exemption.

We've been working on the red tape now for three months. For us, with a fairly large catalogue and twelve to twenty new releases each year, it's necessary and ultimately worthwhile (I hope) to take the trouble. But if I was an independent author based outside the US and with one or just a handful of titles out there, I think I'd seriously think twice.

When I was writing solo from France in the eighties and nineties, I had the choice of paying French taxes on 90% of all income from abroad (mostly US, UK and Australian publisher clients) or opting for tax at source. At the time, there was little benefit in being taxed locally, so I went for tax at source to save all the messing around.

Currently, because there's no treaty between Canada and China, we have not even attempted to challenge the 14% government tax we must pay on income from the Chinese mainland.

Good luck. Neil
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