30% tax on app sales in Amazon's App Store

InsplisityInsplisity
edited September 2013 in General Discussion
Hello,

I just had my first payment issued by Amazon, and to my big surprise, they took away 30% for taxes. All I could find in regard to this is here: https://kdp.amazon.com/self-publishing/help?topicId=201274690

Technically, I could open a bank account in Austria. Would this then put me in the 10% tax category?

Thanks.
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Comments

  • InsplisityInsplisity
    Anyone, please?
  • AppsDevelopmentAppsDevelopment
    edited October 2013
    I am in Austria and I dont pay taxes at all (at least not deducted by amazon. LOL!) :-)

    Where are you located at?
    If you are a non US publisher, you only need to apply for an EIN with the IRS and submit it to amazon.
    That way you get your full amount wired and you are resposible to file your taxes in your home country.

    And no, if you get a bank account here or elsewhere, you still need a local business licence (proof of address, ID etc.) for the IRS in order to get the EIN.

    And believe me, you dont want the business located in Austria with a 50% income tax-rate ....

  • InsplisityInsplisity
    Thanks for answering! :)

    I'm from Slovenia. How do I apply for EIN? Is this the site you have used: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-to-Apply-for-an-EIN

    Thanks again, your answer was very helpful.
  • AppsDevelopmentAppsDevelopment
    What I did, is I printed the form SS-4
    http://www.irs.gov/pub/irs-pdf/fss4.pdf
    called +001 (267) 941-1099
    and gave all the info they asked for (basically all the points you find in the ss4 form and some else about businuess licence, ID but cannot remember anymore what exactly).
    After that I got the EIN number and submitted it to amazon.
    Two weeks later I got the documentation with all details from the IRS by snail mail (to keep for records).

    When submitting your details to amazon, be really careful, that you submit everything EXACTLY like you gave it to the IRS!

    When I first submitted the EIN to amazon, they said "invalid" because I shortened my street address (from "Strasse" to "Str.")

    Hope this helps :-)
    Good Luck!


  • InsplisityInsplisity
    Thank you so much! Who will answer on the number you've called? :)
  • AppsDevelopmentAppsDevelopment
    Forgot ... I think, you can also fax the SS-4 !
    That saves the spelling hassle!!!

    But you still need to call and stay on the phone while doing so (wasnt an option for me, since I only have one line that I share with the fax machine)

  • AppsDevelopmentAppsDevelopment
    The IRS!
    Thats the number you find here
    http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-to-Apply-for-an-EIN#sthash.x7lGvEte.dpuf
    and they say
    "Note: International applicants must call (267) 941-1099 (Not a toll-free number)."
  • InsplisityInsplisity
    You're great Sylvia! :) How did you found out about this? I also saw the line in W-8BEN form which said, that if I don't have EIN, I can't be excused of the 30% tax, no matter what. But when I opened those PDF's, I thought this is too hard-core, it must be an easier way. :)
  • AppsDevelopmentAppsDevelopment
    Don't know who much the 30% are (that you already paid) and if it is worth your time, but you still can get it back at the end of the year.

    Simply files you taxes with this form
    http://www.irs.gov/pub/irs-pdf/f1040nr.pdf
    and mail it to the IRS.

    I will probably do it, because I had the same problem with my first payment and the tax deduction was over $100.

  • AppsDevelopmentAppsDevelopment
    Well, I read through the first page and saw, that they say "call" and that's what I did :-)
    I simply gave it a try and the lady over there was really nice (I think she is used talking to non US people) and patient.




  • InsplisityInsplisity
    Sylvia, you are golden!

    I too had over $100 taken away. I really need to act fast so this doesn't repeat.

    If you live near Vienna od Graz, I'm buying you a lunch. :)
  • AppsDevelopmentAppsDevelopment
    Near Vienna it is :-)
    You are very welcome anyways!
  • InsplisityInsplisity
    When I'm next time there, I'll let you know for sure. Thanks.
  • holyoak.comholyoak.com
    Are you sure they took 30% in taxes, or was it just their 30% commission that was subtracted?
  • InsplisityInsplisity
    It was taxes, no doubt about it. Maybe it has something to do with this: https://kdp.amazon.com/self-publishing/help?topicId=201274690
  • AppsApps
    This 30% tax is withheld when there are actual app sales, or it also occurs when there are payments from mobile ads?
  • AppsDevelopmentAppsDevelopment
    I would assume on both of them.
    But since I submitted my EIN before I started with amazon ads, I cannot say for sure.
    Wouldnt make sense, if they withhold tax only on sale-income and not on ad-income (income is income in the eyes of the IRS :-).

  • AppsApps
    Thank you! I think i will make no changes and find out when I reach the minimum payment.
  • djlfpro21djlfpro21

    @hendrixs ; tell us how everything goes with you and the EIN, please.

                    

  • InsplisityInsplisity
    Will do. I still have to get to it - it's on my to-do list for almost a month now. Man, I can't start do anything when taxes & stuff is involved. :)
  • djlfpro21djlfpro21

    @hendrixs have you started with the EIN process?

  • InsplisityInsplisity
    @djlfpro21: not yet. I'm ashamed to admit this. I wasn't slacking off, I just can't find the will, since so much is going on. I will start today, just because you've mentioned it.
  • djlfpro21djlfpro21

    @hendrixs ok that´s fine, don´t worry, better times will come, you´ll see.

  • InsplisityInsplisity
    edited November 2013
    @sylviathewitch: Did you also appy for ITIN (International Tax Identification Number - for individuals only)? Thanks.
  • InsplisityInsplisity
    edited November 2013
    I just found an on-line method to apply: https://sa1.www4.irs.gov/modiein/individual/index.jsp

    Cool. This is mandatory for non-US publishers, if you don't want Amazon (for example) to withhold 30% of your earnings for taxes.

    Update: Online form is applicable for US residents only. This is nowhere stated on the site, but in a PDF document, I've just read. For online application you need a Social Security Number.
  • AppsDevelopmentAppsDevelopment
    No, I didnt. Only the EIN.

    And yes, I found that online form too ... but unfortunately not good for us poor Europeans ;-)
    But as I said earlier, it's really easy to apply for the number through phone.
  • InsplisityInsplisity
    I've called them today, while totally forgetting, that's it's Thanks Giving day over there. :) I will do exactly as you did - I will fax the form and then call them. I feel stupid for not doing this any sooner, because the form is really easy to fill out (I've found a filled out example on IRS).

    This will be a lesson to me.
  • f1_fanf1_fan
    Once I opened Amazon account automatically I was asked to fill out tax return form and it was for non-us citizens. I did that I've received tax number or whatever it is called and that was it
  • tamworthheattamworthheat
    I'm in UK and I only had to give bank and personal details, that's it, no forms.
  • InsplisityInsplisity
    edited November 2013
    I too didn't have to fill out any forms, except for the W8-BEN. But I was shocked when they took away 30% of my earnings. So, 30% is Amazon's cut, and 30% for taxes, which leaves me with almost nothing.
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