kindle UK tax question

by jumshi 6 replies
I am stumbled at this section

Do you derive the income for which you can claim treaty benefits?
YES
NO

Income may be derived by either the entity receiving the item of income or by the interest holders in the entity or, in certain circumstances, both. An item of income paid to an entity is considered to be derived by the entity only if the entity is not fiscally transparent under the laws of the entity’s jurisdiction with respect to the item of income.


what does this mean? i am in UK, so obviously i am getting income from amazon kindle books, so do i tick YES? whats treaty benefit?


#main internet marketing discussion forum #kindle #question #tax
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  • UK Tax can be very confusing. It is far better to seek out professional advice to ensure that you don't make any costly mistakes. If you need an instant answer check out the HM Revenue website or call their helpline. Contrary to popular belief the UK "tax-man" is actually very helpful and they can talk you through filling in the forms.
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    • Profile picture of the author SunilTanna
      Originally Posted by lorrainesmithills View Post

      UK Tax can be very confusing. It is far better to seek out professional advice to ensure that you don't make any costly mistakes. If you need an instant answer check out the HM Revenue website or call their helpline. Contrary to popular belief the UK "tax-man" is actually very helpful and they can talk you through filling in the forms.
      FWIW, yes I agree that you should get advice on UK tax matters, if possible independent advice from an accredited UK tax advisor.

      However I think he is talking about filling in the forms required by Amazon to not deduct US withholding on copyright royalties from US Kindle sales.

      You might find this article helpful.
      Tax on US royalties | Self-publishing adventures
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      • Originally Posted by SunilTanna View Post

        FWIW, yes I agree that you should get advice on UK tax matters, if possible independent advice from an accredited UK tax advisor.

        However I think he is talking about filling in the forms required by Amazon to not deduct US withholding on copyright royalties from US Kindle sales.

        You might find this article helpful.
        Tax on US royalties | Self-publishing adventures
        HM Revenue are really helpful even when you are filling in forms which do not relate to your official tax return. It can be quite reassuring to get an "official" answer, so you don't risk being stung later.

        I agree with you, that the answer to the original question is unlikely to be given on a forum.
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  • Profile picture of the author KenJ
    Originally Posted by jumshi View Post

    I am stumbled at this section

    Do you derive the income for which you can claim treaty benefits?
    YES
    NO

    Income may be derived by either the entity receiving the item of income or by the interest holders in the entity or, in certain circumstances, both. An item of income paid to an entity is considered to be derived by the entity only if the entity is not fiscally transparent under the laws of the entity’s jurisdiction with respect to the item of income.


    what does this mean? i am in UK, so obviously i am getting income from amazon kindle books, so do i tick YES? whats treaty benefit?


    This question is on the IRS W8-BEN form. This form is required by Kindle/Amazon/Createspace. By successfully completing it you will stop the tax witholding that those sites do. Currently 30%. (So if you earn $1000 they will withhold $300 of it).

    Recently the form was made digital in the Kindle website. This means that lots of UK Kindle authors will be asked to fill it in. This is even if they have already sent one in by Mail.

    As to the specific question. I answered YES. This is because I write all my own content. It is not derived from other peoples work. I didn't think it was that complicated a question. The of of the word "derived" is a bit odd I suppose.

    KenJ
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  • Profile picture of the author hngems
    I would say you should tick “NO” based on the statement you have said "An item of income paid to an entity is considered to be derived by the entity only if the entity is not fiscally transparent under the laws of the entity’s jurisdiction with respect to the item of income".

    Its better if you take help form experts in this case. Check out this [developer.amazon.com/help/faq.html#SalesPaymentTax] for more details. I think this will help you.
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    • Profile picture of the author Martin Avis
      While the advice to seek professional guidance in accountancy matters is very sensible, and in most cases correct, I would caution that in my experience UK accountants have very little understanding of US regulations or terminology. The IRS is particularly prone to using jargon that means little to those outside of America.

      For that reason, study the notes that the IRS provide on their website very carefully: http://www.irs.gov/pub/irs-pdf/iw8ben.pdf
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