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6,167 Views 8 Replies Last post: Nov 13, 2009 5:15 PM by Dar-El RSS
Level 0 83 posts since
Nov 8, 2009
Currently Being Moderated

Nov 13, 2009 3:52 PM

TAX

I am a newcomer to online publishing, but have one novel ready to go and two halfway.  I live in Australia which has protectionist tariff policy.  From what I can discover I will have to pay tax in the USA on every sale (including my own orders), import duty on every book I or a customer orders, the Australian Goods & Services tax (10%), followed by income tax on anything I earn.  This creates a prohibitive wholesale price to retailers, online or door-to-door.

 

Does anybody know anything about this?

 

Cheers budding authors.

Level 3 724 posts since
Jan 30, 2009
Currently Being Moderated
1. Nov 13, 2009 4:12 PM in response to: Dar-El
Re: TAX

Yes, the US will impose a tax on foreign royalties-- you can have a tax professional with experience in foreign income taxation do a tax return for you and recover most of those amounts; there are favorable tax treaties for artists and writers.

 

But you are still going to have to pay them and try to recover them later. The tariffs are a serious issue, too-- but you can get around most of this simply by selling the majority of your books in an e-book format. You can format your book for the Kindle and sell it on Amazon, and you can also sell e-book versions of your book through CreateSpace. I assume that the tariffs imposed by your country are on physical goods only.

 

Christy Pinheiro, EA ABA

Author of:The Step By Step Guide to Self Publishing for Profit!
Level 5 11,791 posts since
May 4, 2008
Currently Being Moderated
2. Nov 13, 2009 4:17 PM in response to: Dar-El
Re: TAX

You do not pay tax on sales or your own orders in the US. The only tax withheld by CS/IRS is on the royalties earned from Amazon/e-store sales. Some American customers might have to pay sales tax on your book, but I don't know how that works (I'm an Aussie too).

 

If you order copies of your own books to sell here, you only add GST if you have an ABN and are registered for GST with the ATO. If you're not running a business and selling your books via this business (ie. to friends and out of the boot of your car), you do not add GST and therefore you do not have to pay GST to the ATO.

 

I also don't know anything about import duty. I have not had to pay any on my book orders.

Level 4 1,093 posts since
Sep 4, 2008
Currently Being Moderated
3. Nov 13, 2009 4:32 PM in response to: Tax_Writer
Re: TAX

Tax_Writer wrote:

 

You can format your book for the Kindle and sell it on Amazon, and you can also sell e-book versions of your book through CreateSpace.

 

 

Hi again Christy,

 

The first option (= kindle/amazon) sadly will still not work yet for Australian or non-US authors, as long they don't have all of those:

1) US - EIN/tax number,

2) physical mailing address in the US, plus

3) US bank account.

(But smashwords do offer ebook distribution for non US-authors/publishers on their own site, and through barnes & nobles + sony reader.

 

The second highlighted option is new to me.

How is this going to work, and where did you see that option at CreateSpace?

 


Level 5 11,791 posts since
May 4, 2008
Currently Being Moderated
4. Nov 13, 2009 4:39 PM in response to: lipmag
Re: TAX

Further to my previous post, if you are selling your books as a hobby "business" you do not have to declare profits until you earn a certain amount. I forget what this amount is (it's in the $1000s) but you can look it up on the ATO website. But once you earn over that amount you have to declare it in your personal income tax return. You don't have to declare income from royalties on overseas sales because you have already paid tax on those in the US.

 

If you lodge a tax return in the US to recover that tax on royalties, then you will have to add that to your personal income tax as well.

 

If you're confused by any of this, you should talk to an (Australian) accountant. Any tax "advice" you receive on this forum may not be applicable to you as the majority of people in this community live in the US and they have vastly different tax rules.

Level 5 11,791 posts since
May 4, 2008
Currently Being Moderated
6. Nov 13, 2009 5:04 PM in response to: Dar-El
Re: TAX

That government decision on import tariffs doesn't affect self-publishers. What it means is, say you have book published by Allen and Unwin in Australia, and you also sell the rights to a big US publisher like Random House. The US version will naturally be cheaper than the Australian version so book stores will want to buy from the US rather than from the Australian publisher and that will send a lot of Aussie publishers broke. So the government places a tariff on the US books to ensure they are priced in the same league as the Australian books.

 

It won't affect you as a self-publisher because you're the only person/company publishing it so there's no competition.

 

As for ordering your own books... My largest order to date was for 100 books (in a single order - however, I routinely place multiple orders over several months). I haven't had to pay any import tariffs or customs taxes or anything other than the books themselves and the shipping charges.

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