I’ve talked before about different vendors and distributors you may want to use to sell your books. When you do that the important thing to set up with them is to make sure you can be paid.
One of the benefits of the global market for ebooks and print on demand paperbacks is that you can very easily make your books available for sale across the world. And they can be bought across the world. But that then immediately brings problems of currency conversion and tax with-holding treaties and so on.
None of the points I discuss here are to be taken as tax or financial advice. Always seek the advice of a professional on the details pertaining to your personal situation.
So when you first set up all your online accounts with retailers and/or distributors you need to fill in all your financial and tax information. These are vital to do correctly before you are able to be paid, and you need to do them for each site.
Most of the major companies you are likely to deal with are based in the US, though Kobo is one exception as they are based in Canada. Much of the world’s book buying population are also there, as is a large proportion of successful self published authors, especially those in the English language. This means that a lot of the advice for how to set up as an author business is for people based in the US, with a largely US audience. If you are not resident in the US, and/or you have an audience out of the US then you need to be aware of currencies and taxes.
Even for those of us outside the US we still need to deal with the US tax system, even if it is only to tell them that we are a tax resident of a nation with a tax treaty and so the withholding rate should be something else. If you don’t do this, and it needs to be done for each of the sites, then the US government will keep 30% of your royalties. Depending on which country you are tax resident in there are various treaties which lower this rate, all the way to 0% for some. Other countries have similar tax arrangements, but the US is likely to be the most crucial to get done as soon as you can.
Once you’ve sorted out tax then you need to work out how you will be paid. Each retailer or distributor has different thresholds for the various currencies and methods of payment they use. Check what these are, as there are options for creating bank accounts in different currencies in order to maximise how often you are paid. Different retailers and distributors have different payment thresholds for different currencies, and these are often the lowest for American Dollars. So it may be in your interest to be able to be paid in dollars as then you will be paid earlier.
Most services, that I’ve found allow you to add one bank details, but Amazon allows you to add different bank details for each store. This means you can get paid for the dollar transactions in dollars, and for the euro transactions in euros and so on. This is only really worth doing for those currencies where you are likely to make regular sales. I find this useful as I can get paid in dollars from Amazon US and then spend those dollars on services that I use. And I don’t need to switch it between currencies in between. As every time you switch currencies you lose a bit in the fees.
Personally I use Transferwise for their borderless bank account, but other similar products exist. These allow you to have one bank account that can hold multiple currencies, and which has the correct local details to be used within those countries. So for the EU it has an IBAN, for the UK an account number and sort code, and for the US a Routing number, etc. It doesn’t give you any interest on the balance you hold there, but who does these days?
Then there are the taxes you need to pay where you are resident. And for those it is best to talk to a financial consultant who is familiar with the taxes and business set-up where you are, and preferably one who knows about the business side of being an author too.
There are options for setting up a business in the US, even if you son’t live there, but I’m not certain that it is worth doing for me. At least not at the moment.
It amazes me that my books are sold across the world, That people from Australia, Brazil, Spain and Japan are all reading my advice on the expat family life. Whenever I sell a book it is a real thrill to see where they are from, and I look forward to that increasing as I sell more globally.