What are UK citizens selling iBooks doing about obtaining US tax ids? (ITIN vs EIN / do you then need to send annual tax returns?)

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What are UK citizens selling iBooks doing about obtaining US tax ids? (ITIN vs EIN / do you then need to send annual tax returns?)

I'm attached these questions earlier to another thread, but think they may be located more easily if I start yet another one about this issue... PLEASE CAN I ASK EXACTLY WHAT ARE OTHERS FROM THE UK DOING?

I'm from the UK, and am trying to wade through the messy US tax ID conundrum in order to try to sell iBooks...

After making a 50 min call to the US yesterday, I remain completely confused!

Apple send you to the EIN part of the US tax website, for businesses, but a lady has just gone to great lengths to explain to me why this is not for individuals, and that everyone with one must send in an annual tax return (can I ask if those of you from the UK with an EIN do this, and if not why you think we don't have to? If you do, what does it entail? She sounded like they'd be chasing these up...)

So I'm told I instead need an individual ITIN. The main differences being that instead of getting one over the phone in 10 mins, you apply by post, it takes 6-10 weeks to get one, and you need to provide the following:

1. A signed letter on official Apple letter headed paper (preferably hand signed by someone from Apple?) saying why you need an ITIN. (Is there a template for this somewhere, does anyone know, as this lady implied that there must be?)

2. Either your original passport (I'm not keen on posting that to the US!), or a copy signed and verified by someone at the London US Embassy (we live nowhere near London!)

So in short, to other UK citizens out there, HELP, what have you found to be the simplest solution to all this. (And if you have gone the EIN route, which boxes do you recommend ticking on the application form, and does this mean I would need to somehow officially register as a company in the UK?)

iBook

Posted on Dec 19, 2013 1:32 AM

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Answer 1

Top-ranking reply

lizburkinshaw

Level 1

4 points

Jul 16, 2014 2:59 PM in response to Melindagb

UK residents DO NOT need an EIN - confirmed by the Apple Legal team. See below. Hope this helps everyone! All i needed was my IBAN...

Dear Team,

I'm not sure how, but when setting up my tax details on iTunes Connect i was faced with a page on which to enter my UK tax details. At the time i did not have an EIN, but now that i do i can't enter it. Please can this be entered onto my account for me?

Liz

Hi,

You do not need an EIN. Your contract is in effect, and you are ready to upload and sell books.

Please let me know if you have any further questions.

Best regards,

The iTunes Store Legal Team

1 Infinite Loop, MS: 36-4ISM/ Cupertino, CA 95014, USA

iBookStoreContracts@apple.com / Fax: 408-974-9105

Thank you. I uploaded my first book three weeks ago and it still isn't in the stores. There is lots of confusing info on your discussion sites and even the itunes connect page says everyone must have an EIN for a paid books account. I wondered whether my first book is taking so long to publish because I had filled something in wrong?

Thank you

Liz

Hi,

Nothing is wrong, we just changed our policy! So when you are an individual, NOT in the United States, you do not need an EIN.

If you want to check up on the status of your book approval process, please email ibooks@apple.com.

Please let me know if you have any further contract questions.

Best regards,

The iTunes Store Legal Team

1 Infinite Loop, MS: 36-4ISM/ Cupertino, CA 95014, USA

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Answer 2

vinnyvg

Level 4

1,880 points

Dec 29, 2013 9:47 PM in response to Melindagb

IF.. you have an iTunes Connect account... open it and check out the Contracts and Banking.

You can if you choose open the contracts section and read what requirements you need to comply with.

Do the same with the banking section.

You can - if you choose make entries where you have the correct information and make notes of the items/section which you need help or advice with.

FORGET what the US tax person said - and any post you read which say you have options to avoid a countries tax systems.. You are dealing with Apple and they comply with International laws on Money laundering and they are a US based corporation and deal with US tax laws.You either meet their requirements or you do not get an account.

You WILL need to obtain an EIN from the US IRS offices, Apple state EIN and nothing else will be accepted. Again, unless you are a commercial publisher and your staff will be involved... ignore anything other than you need an EIN.

UK residents/citizens with banking in the UK - also need to apply to their bank for an IBAN number - its related to having money from outside the UK being sent to your bank - part of the International anti money laundering regulations.

Use this number and calculate US east coast time and call at THEIR 6.630pm-7.30pm and you will not waste time.

1-267-941-1099 USA IRS Telephone.

Use this link to download the SS4 PDF - print it off and fill it in, when you Phone have this form with you.. the agent will ask if you have it and work down the form in logical order. IF you have parts which confuse you... tell the agent WHEN YOU GET IT.. not before and work logically through the form.

At the end you will be given an EIN number write it down and make sure its Correct.

http://www.irs.gov/pub/irs-pdf/fss4.pdf

If you have everything else, you can now apply for a paid book account..... The US office will send you written confirmation.. it takes 2/3 weeks. IF you do make an application.. it will also take Apple 2/3 weeks to be able to confirm your EIN is registered...so dont keep posting about it being ignored.. wait.

The same and possibly more information is also on this thread.. last page.

https://discussions.apple.com/thread/3105682?tstart=0

This video may help you - its in your iTunes Connect.

https://itunesconnect.apple.com/downloads/Documentation/ContractsTaxBanking.mov? itcKey=1369955192_56afcb6cb7142935d47c35deb452487a

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Answer 3

Melindagb Author

Level 1

0 points

Dec 19, 2013 1:48 AM in response to Melindagb

I just found this on an old 2008 thread, is there in fact some sort of magic code of zeros that really lets us escape from this US tax id problem? Has anyone any recent experiences with this?

"trumi

Re: Itunes Connect Tax Information

17-Jul-2008 10:36 (in response to mpatric)

I've already solved that issue.

I wrote a mail to the apple support and had an answer within half a day.

It is very easy, because you do not need any number at all. Here is what they wrote:

---

There is no withholding on applications since the contract is a sales/commission basis, as opposed to a "royalty" basis.

Therefore, please enter nine zeros (000000000) in the space provided for the tax ID number. There will be no withholding, and nothing reported to the IRS for USA sales.

There are no treaty benefits since these are not "royalty" payments. I know this is confusing, but our tax department wanted to have these tax forms completed.

---

So in line 6 enter the nine zeros and check SSN or ITIN.

As an individual you would not need any reference number in line 8.

For me it was enough to check line 9a.

Line 10 can be left blank as well as line 11.

Hope this helps!

It seems to be important, that you do not check the box at line 11

MacBook Pro 15", Mac OS X (10.4.7), 2,16GHz 2GB RAM 100GB

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Answer 4

Melindagb Author

Level 1

0 points

Dec 30, 2013 4:28 AM in response to vinnyvg

Thanks for your reply vinnyvg.

I already "took the plunge", and obtained my EIN on Christmas Eve. To be honest, I have found the Apple Support Community threads very confusing on the matter, and made my decisions based on 2 blog posts recommended to me by fellow authors. I have listed them below, in case they can help anyone else too. As far as an IBAN number, I appear to already have one as routine on the top of my bank statements. (It appears to simply be a way to identify your bank account worldwide.)

2 very helpful blog posts:

http://catherineryanhoward.com/2012/02/24/non-us-self-publisher-tax-issues-dont- need-to-be-taxing/#comment-29944

http://lissowerbutts.com/getting-your-us-royalties-tax-back-non-american-authors -new-zealand-edition/

I am not qualified to give anyone tax or legal advice, but drew the following personal conclusions to my own nagging questions:

1. In an ideal world a personal ITIN would be required, but it is difficult to obtain, so an EIN will do.

2. To obtain an EIN you simply need to declare yourself a business, you do not need employees. In the UK this seems to be most easily achieved by declaring myself a "Sole Trader" business. The HMRC Tax Site provides info on this, and what it means. Current requirements seem to be that you register with them no later than October of your business' 2nd tax year, and send in annual UK self-assessment tax returns (presumably required for anyone selling ebooks anyway).

3. Naming your UK "Sole Trader" business using simply your real name with no additions seems to avoid having to carry out any further name-related checks (and possibly also avoids needing to produce stationery with your business name on?)

4. Becoming a business does not appear to effect my own house insurance, for now, as long as I only write ebooks as a hobby.

The 2 blogs above go step by step through the "how to get your EIN number" process.

I rang the IRS from the UK on 001 267 941 1099, selected new option 1 for foreign EINs, and got through instantly at 11am UK time. (7am Pennsylvania time. The friendly operator told me they were never usually busy that early in the morning. My earlier attempts to get through to that option in UK evenings had been unsuccessful, just getting an automated message to try another time. I think I may gave read somewhere that only so many foreign EINs now get given out each day, so wondered if the quota was already up by then? ) I went through my printed off SS4 form over the phone, and had my EIN in less than 10mins.

I was then instantly put through to a US tax lawyer, so that I could ask if annual tax returns were in fact required. His advice was simply that if I received a letter from the IRS requesting a tax return and I believed that I should be exempt, then it was very important that I immediately wrote back explaining why I believed I was exempt, and did not simply ignore the letter. I guess if my exemption reasons are incorrect under current tax laws, then at least that means the IRS will be back in touch explaining this.

The first blog post I mention above has a lengthy thread associated with it, and highlights one contributor's reasons as to why I could well find myself exempt from sending in annual US tax returns. I find the exact legal wording complex, however, and am left confused over whether the 3 exemption clauses are filled when doing business with Apple rather than Amazon, Createspace etc. From my own very limited understanding, Amazon etc do act as "tax withholding agents" on your behalf, but Apple do not. For the UK, this difference appears academic, as current "tax withholding" rates appear to be 0%. I will wait and see what the IRS make of this later...

When asking Apple if they even offered an official letter required for obtaining the personal ITIN (they apparently currently do not), I, very usefully, accidentally discovered that ISBNs are no longer required for "paid books" as well as for "free books." I pointed out that the current wording they use in the details they supply over this is a bit ambiguous, and they promised to review that.

To all others tackling this issue, good luck! ❤️

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Answer 5

vinnyvg

Level 4

1,880 points

Dec 30, 2013 2:31 PM in response to Melindagb

Hi Melinda,

Your information will be really useful to other reading this thread now or later when found in a search.

To be honest, I have found the Apple Support Community threads very confusing on the matter

This is probably due to a number of reasons, the first being that everybody is an individual and percieves things different to the next person. How they dealt with a problem - will be different from another person dealing with the same problem.. ie obtaining an EIN and how they did it. We also have many "members" who do not have Engish as their first language, and some are more proficient than others. Add to that, - that the US IRS website gives information which, to be honest seems to be un-workable. Many took the advice to email or send fax/facimile applications, none from what I read.. ever got a reply.

Anybody coming new to iBooks Author has probably done so after learning its possible to make ebooks and get them online in the Apple store. Without doing any background checks... they set about making a book and when done and try to upload... they are hit with Apples Contract and Banking requirements.

Apple have additional requirements for USA, Canada and Australia. I do not know what the USA and Canadian applicantst need to supply, the Australians need to obtain an ABN - Australian Business Number and submit income from sales in their tax returns. I also know that UK applicants will need to apply to their bank for an IBAN its an anti money laundering regulation allowing Apple to make payments from the USA to a UK bank.

Taking stock of the above, the conclusion is that some individuals will seek out the information required for the Contracts and Banking section, obatin the EINand anything else and basically walk through without issues.

I have to agree that Apple seem to think that making a puzzle of its help and support at times, makes it interesting to solve! I have written her before that Apple would save countless hours of support workers time, if they assigned one of them to write an A-Z of how to obtain information and submit applications..AND take into account that nationals from many countries move around the world and have different perspectives of regulations, applications and requirements.

BTW, the UK tax inspectors will see making free books as an hobby, submitting books to the store to be purchased is not!...Its a small business and as such any income needs to be added to your tax return.

There is some good news which many fail to make use of. If you start to make money.. contact the tax office and ask advice.. which will be add to your tax return. I did a similar thing many years ago when as an amateur photographer making money at wedding etc,. I was a advised it was classed as a self employed business, so I replied, then as a business I can claim legitimate expences on anything used to operate that business...Yes!

So, its feasable that a part of the cost of anything used to make books... computers, additional software, travel costs etc,. are tax deductable. The same must apply in almost every country!

Hope you enjoy great success with your books... Have a Great New Year

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Answer 6

Melindagb Author

Level 1

0 points

Dec 31, 2013 4:56 AM in response to vinnyvg

Hi Vinnyvg

Thanks for taking the time to reply. Yes, I hoped that by detailing my own findings it might help someone else who stumbled upon them.

I think the other confusing problem when trying to search the Apple support community threads is that they often span many years, during which time both Apple requirements and general tax requirements are probably changing.

My reference to charging for ebooks as being a "hobby" was simply from my current house insurer's point of view. Exactly where the line was drawn seemed ambiguous, but until a significant amount of money was earned "hobby" seemed acceptable to them, so they did not feel my house needed extra business premises insurance. I mentioned this as it might be something others might want to look into when suddenly declaring themselves an official "business".

"Anybody coming new to iBooks Author has probably done so after learning its possible to make ebooks and get them online in the Apple store. Without doing any background checks... they set about making a book and when done and try to upload... they are hit with Apples Contract and Banking requirements."

I'm probably one step behind these people! I only started writing ebooks as I have to spend a lot of every day lying down, and this is one activity I found I could do with my trusty iPad. I created books using the Bookcreator app, only then realising I had to borrow a Mac PC to even upload to the Apple iBookstore! I then discovered that "self-promotion" post-launch was far trickier than writing books, but at least it has introduced me to lots of helpful FB groups, where things such as tax issues get discussed.

I agree that it would be wonderful if Apple could assign someone to write detailed instructions on how to obtain information and submit applications. I suspect they cannot, as far as US tax goes, due to legal reasons / disclaimers. Even directing you to the EIN section of the IRS website seems quite brave of them, as I still suspect most of us should ideally be obtaining ITINs. The EIN requirement seems really to reflect upon difficulties with the US ITIN system.

Thanks for your good wishes. I hope 2014 will be a good year for both you and your own ebooks!

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Answer 7

Dec 3, 2016 3:59 AM in response to Melindagb

This is a problem I have just come up with and it is getting to me. I am a UK citizen born and bred. I don't live in the USA or intend doing so. I am retired and write for fun and pin money and have just completed a 137 page e-book which I would like to sell in the i-Books library. I can understand why the IRS want to know if they will be owed any tax, but for non US writers the hoops we have to jump through to sell our work this way are beyond reasonable. Surely it would be enough to provide our UK National Insurance number and home address to satisfy the IRS that we are not US citizens and can take advantage of the treaty that exists between our two countries. Simple, less form filling and even less bureaucracy.

I'm publishing through Blurb Books and seem to think I do not need this EIN or ITIN number. However, I'm not happy that the IRS can withhold 30% of any profit made in the US until such forms are filled in and accepted. It doesn't stop at the EIN or ITIN ID does it. UK citizens need a certificate of foreign status so that we can be taxed by our country of residence. That is form W8-BEN. It can be filled in online here: https://www.pdffiller.com/en/project/86091602.htm?f_hash=03093f I haven't sorted it out myself yet, but will be doing so over the next couple of weeks. Thankfully you only have to do it the once. When I get further info from Blurb Books I will come back and let you know. In the meantime, happy nightmares.

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