22 May 2008

Tax Issues For International Sales – How To Promote My Book On The Internet


My main markets, as my book is written in English, are naturally going to be the UK and the USA. I am looking to achieve sales of printed versions of the book by offering free downloads: I figure if people like hooked by the first few chapters of the download that will be willing to purchase a hard copy. Obviously there are no tax implications for the download, but I find I have overlooked the Sterling/Dollar exchange rate when selling hard copies to America. A paperback book price of £5.99 translates into something like $12.00, plus P&P – too expensive I believe for my younger US target audience.

The answer, I believe, is to also self-publish the book via a US based Print On Demand publisher. For cheapness, and because I may later want to attempt and assault on their best seller list, I have chose Amazon. Publishing via their subsidiary Createspace.com produces a book listed on Amazon US at a cost price of under $8.00 + p&p. A price more acceptable, I believe, to my US target audience.

Now the tax bit. As a UK citizen I could end up paying double tax on any potential profits by publishing direct in the US: Tax deducted on the sales by the IRS and UK income tax to the Revenue. To avoid this issue, if I ever decide to sell for a profit, I will need to complete a form W8 and possibly W7 for the IRS so I become exempt from US tax. CreateSpace.com have a good explanation here.

I now find that to cover all angles I have published the book in three different places: Lulu.com (PDF download and Sterling hard-copy), Smashwords.com (all e-reader file formats), and Amazon (Dollar hard-copy).

You may well ask why I’m bothering with the US market. The answer is that I have good reason to believe Helium3 might be more suited to the US market than the UK market. Also, there are far more US readers online and as I have chosen to market via the Internet I would be foolish to ignore this vast potential audience.

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