LuLu withholding taxes

[TedFichialos]

I just sold my first book and it shows under my revenue $2.00 withholding and I was wondering if this was for taxes?

[Ken Anderson]

Probably.

[norrimac]

Hi Ted,

We had a discussion about this recently. Peter posted the following:

Norman.

PS Thanks for the PM. Sent you one back.

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norrimac wrote:
Does Lulu withhold taxes on sales in ALL territories? I have a book in both US & UK/Aus/NZ versions. I assume because Lulu is a US company, tax is deducted at source - ie, by the IRS man? GRRRRRRRRRRRRRRR! Norman

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No.

It depends. If you use a Lulu ISBN then tax is deducted. Incidentally 30% deems outrageously high since we don't get any of the benefits of the US state.

If you are a Foreign entity (What is a Foreign Entity?):

• Withholding is waived when your published material is delivered, either physically or electronically, outside the United States.
• When your published material is delivered, either physically or electronically, into the United States, the Royalties earned on these sales are subject to US withholding.
• Foreign entities should complete and submit a W-8BEN form that remains on file with Lulu. A properly completed form provides us with your Individual Taxpayer Identification Number (ITIN) as assigned by the Internal Revenue Service of the United States, and also assigns you to a Beneficial Country.
• With a valid W-8BEN form on file, your withholding rate is the percentage defined in the tax treaty between the U.S. and your Beneficial Country as appropriate for royalties. These rates vary by country.
• Without a valid W-8BEN form on file, your withholding rate is the default backup withholding rate for foreign entities as set by the Internal Revenue Service of the United States. Currently this rate is 30%.

[norrimac]

Hi Ted,

We had a discussion about this recently. Peter posted the following:

Norman.

PS Thanks for the PM. Sent you one back.

---

norrimac wrote:
Does Lulu withhold taxes on sales in ALL territories? I have a book in both US & UK/Aus/NZ versions. I assume because Lulu is a US company, tax is deducted at source - ie, by the IRS man? GRRRRRRRRRRRRRRR! Norman

---

No.

It depends. If you use a Lulu ISBN then tax is deducted. Incidentally 30% deems outrageously high since we don't get any of the benefits of the US state.

If you are a Foreign entity (What is a Foreign Entity?):

• Withholding is waived when your published material is delivered, either physically or electronically, outside the United States.
• When your published material is delivered, either physically or electronically, into the United States, the Royalties earned on these sales are subject to US withholding.
• Foreign entities should complete and submit a W-8BEN form that remains on file with Lulu. A properly completed form provides us with your Individual Taxpayer Identification Number (ITIN) as assigned by the Internal Revenue Service of the United States, and also assigns you to a Beneficial Country.
• With a valid W-8BEN form on file, your withholding rate is the percentage defined in the tax treaty between the U.S. and your Beneficial Country as appropriate for royalties. These rates vary by country.
• Without a valid W-8BEN form on file, your withholding rate is the default backup withholding rate for foreign entities as set by the Internal Revenue Service of the United States. Currently this rate is 30%.

[TedFichialos]

So at the end of the year I shouldn't have to pay taxes on my royalties right? I like the idea of paying my taxes on my royalties at the time of the sale, it keeps me honest lol.