CreateSpace: Sign up and Tax

sign-upGo to www.createspace.com

Press the blue Sign Up button on the left-hand side of the screen and complete the simple form with your email address, name, country of residence and the type of media you wish to publish.

Don’t tick the little box which reads, Request a free consultation to learn about our professional fee-based publishing services. I’m sure there must be some good designers offering their products through CreateSpace. However, by and large, most adverts are for low-quality, template-based design. If you want a professional cover (which I’d very much recommend) take a look at my posts on Typesetting and Cover Design. These contain instructions on how to find reasonably priced, professional designers.

Click Create My Account, agree to the terms and conditions and verify your email address. This takes you to a page which again offers the chance to talk to a “consultant.” I, again, urge you not to do so.

Royalty Payment Information and Tax Withholding

You’re not quite ready to start setting up your title, yet. First, you need to input some boring but simple financial details. Along the top of the page, you’ll see a list of tabs (Books, Music, Film etc). From these, select My Account -> Royalty Payment Information.

royalty-payment-info

The form you’re presented with comes in three parts:

Part One: Payee Information
Enter your name and address.

Part Two: Payment Information
Do you want paying by cheque or direct deposit into your bank account?
If you’re in the UK, I suggest you pick Direct Deposit. Receiving cheques isn’t only inconvenient but CreateSpace charges a handling fee of £8 per cheque. Furthermore, they only issue cheques once your royalties have reached £108. In contrast, there’s neither a fee nor a minimum payment for direct deposits.
Select European Union (EU) for your Bank Account Country and complete the required fields. If you’re not sure what your IBAN or Swift Code are, check a recent bank statement. IBAN might be shown under its full name: International Bank Account Number and a Swift Code is more usually referred to as a BIC or Bank Identification Code, in the UK. If you can’t find either of these, phone your bank and they should be able to give you the information.

Part Three: Tax and Business Information.

tax-1501475-640x480Press Submit Tax Information and don’t be scared; it’s really very painless. The sole purpose of the questions are to establish if you should be paying tax in the United States. If you’re a UK resident, you shouldn’t.

All you need to complete the form is your National Insurance number. If you don’t provide this, then CreateSpace, as a company registered in the US, has no choice but to withhold 30% of your royalties and give them to the US government.

If you’re searching online about CreateSpace and tax withholding, you may come across complex guides which involve ringing up the IRS to get a US tax number or having your passport verified at a US embassy. These are now, thankfully, out of date. All you have to do nowadays to avoid paying 30% to the US government is answer the following simple questions:

For U.S. tax purposes, are you a U.S. person?
Unless you fulfil one of the specified criteria, select No.

Type of beneficial owner
For the purposes of this form, you’re an Individual

Next, fill out your country of residence, full name and address.

Are you an agent acting as an intermediary?
Are you acting as an intermediary for anyone? Nope, fairly sure you’re just you, Joe Blogs, publishing your own book so select No.

U.S. person tests – individuals
Have a flick through and check you don’t fulfil any of the conditions (holding a US passport or Green Card, having been born in the US or resided there in the past three years). Don’t tick any of these unless they’re true for you.

Tax identification number (TIN)
This refers to your National Insurance Number so select: I have a foreign (non-U.S.) income tax identification number.

Press Save and continue.

If, at this point, you have any trouble with the system accepting your address, simply tick the box under it confirming that it’s valid and you should be allowed to continue.

The next page tells you the good news: the UK has a treaty with the US which states its citizens don’t pay tax to the US government just because CreateSpace is based there. You’ll still need to pay tax in the UK, of course but at least you won’t pay it twice.

Confirm that the United Kingdom is, indeed, your country of residence and tick the little box saying you’ve reviewed Article 4 and you’re not eligible to pay income tax in the US. Then, at the bottom of the page, enter your National Insurance number in the Foreign (non-U.S.) TIN field and tick the box beneath to confirm it’s correct.

After pressing Save and continue, you’ll be presented with an electronic version of your W-8BEN. Don’t try to sign it on this page: you won’t be able to. Simply check all the information is correct and again, press Save and continue.

On the final page, you’ll be asked to confirm it’s OK to sign and deliver your form electronically. Tick the check boxes that appear, confirming that all the statements are correct and you’re eligible for exemption from US income tax. Then, type your name in the electronic signature box, fill out your email address and again, state your Capacity as Individual. Click Submit and then, Exit interview.

You’ll now be returned to your Royalty Payment Profile where you’ll see the happy news that your tax information is complete and even better, the Applicable withholding rate is 0%. This means CreateSpace will hand over your full royalties and won’t have to withhold any to pay tax in the US.

Congratulations! You’re now ready to list your book.

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