In our previous post on this topic, we explained how to publish your book through KDP and how do pricing and royalties work. In this part we will take a look at the tax withholding on royalties for US And foreign authors/publishers as well as the marketing opportunities available through Amazon.
Are there any taxes deducted on the royalties? What tax related information do US and international authors or publishers need to provide to Amazon?
Taxes are deducted on royalties being paid out by Amazon according to US laws.
First, if you are a US publisher, including self-publishers/writers, you must have a TIN which is either an Employer Identification Number (EIN for organizations) or a Social Security Number (SSN for individuals).
If you are an International publisher and Non-US citizen-
- Providing TIN is optional.
- If you do not supply a TIN for taxes, 30% of your royalty will be withheld, even if there is a tax treaty between your country and US, which specifies a lower tax percentage. You may not be able to take advantage of any double tax avoidance treaties either.
Can your e-book be free on Amazon?
In general, no. You can not put up your e-book for free through KDP.
But there are two ways to get around that policy.
First is if you want to make the book free for a limited time for promotional purposes, the best way is to sign up for KDP Select and use your “Free promotion days” that come with it. (KDP Select is covered next)
Secondly, you can manipulate their price match policy. Utilizing a method used by many authors to make their e-books free, what you have to do is publish the e-book on another platform, which allows you to sell the book for free. Then have your family, friends and readers “report a lower price” from the Amazon’s page of your book. They lower the price to match the minimum one and will make it zero-priced. This is advisable only if you intend to keep it free permanently. Getting the price back up again can be difficult.
Okay so it’s great that your e-book is on Amazon. How do you market it?
Amazon’s KDP Select program is designed for marketing the e-books published through them.
KDP Select is an optional 3 month promotional program. To enroll in the program, you need to make your e-book available exclusively through them for the period of enrollment. You cannot sell it through any other platforms, nor through your own website or blog. However, 10% of the book can be available on other sites as a sample, and you can continue to distribute your book in print format. You can also provide professional reviewers with a copy of a book by email. And you can email the book for the purpose of proofreading, editing, and any other related help.
Benefits of KDP Select
If you choose to be part of the program-
- You are eligible to be included in the Kindle Owners’ Lending Library (KOLL), which means you get a share of the KDP Select Global Fund, when your e-book is borrowed.
- KDP also regularly announce in the media the top digital books borrowed, including the publisher/author, number of books borrowed and the KDP Select royalties earned, which provides extra promotional support/free advertising.
- You can participate in the Free Book Promotion (readers across the globe can get your book for free for a limited time) and in Kindle Countdown Deals (limited time promotional e-book discounting).
- By enrolling your book in KDP Select, you will also be eligible to earn 70% royalty for sales to customers in Brazil, Japan, India, and Mexico
To know how to make the best of promotional opportunities provided by KDP select, see our earlier post on marketing your e-book.
If you have any questions about Amazon that we did not address, please contact us, leave feedback, and let us know if these posts are helpful. We, at InstaScribe, are all book lovers and we are here to help. We are dedicated to serving authors from all over the world. We have the best publishing format software in the business. Contact us and find out more. Our next posts will look at other e-book publishing platforms in details. We look forward to hearing from you.