Those (self) publishers out there who are signed up as a Google Books partner and trying to sell their books on the Google Play store will have received an email from Google yesterday announcing changes to the payment settings for those who wish to sell on the US Google Play market.
Now most people in this business will already know about the challenges of selling on US Markets when based abroad – the US Tax laws require the likes of Amazon, Smashwords and now Google to withhold some Income Tax for every royalty you earn. But there is a way to avoid or reduce this tax deduction, depending on any double taxation agreements your country of residence has made with the US Government. Upon successful completion of some paperwork formalities, publishers in the UK or Ireland can get full exemption from these deductions, whereas Indian publishers will halve their deducted tax; from 30% to 15%.
You basically have to register yourself as a foreign entity or foreign person with the US Tax authorities (IRS) and they will give you an identification number of some kind. We at WriteHit did this before even listing any books for sale because it just doesn’t make business sense to forgo 30% of your hard earned money due to taxes which should not be applicable to you.
For more information on the process, this blog post has been invaluable to us: http://catherineryanhoward.com/2012/02/24/non-us-self-publisher-tax-issues-dont-need-to-be-taxing/
So in short: This is nothing new at all. Most people will have done this (or plan to do this) for the likes of Amazon already and now they just need to fill out another form with the tax identifier that the IRS has provided them.
Google’s email states that publishers will be paid as normal until 31 December 2012 so you do have quite a bit of time to comply before you’re directly affected by these changes.