Why Amazon Withholds Tax From Non-U.S. KDP Authors
Amazon is classified as a U.S. withholding agent under the Internal Revenue Code. That classification means Amazon is legally obligated to collect tax information from every author it pays — regardless of where that author lives — and to withhold a percentage of payments when the required tax information is not on file or is incomplete.
KDP royalties are classified as royalty income for U.S. tax purposes. Royalties paid to non-U.S. persons from U.S. sources are subject to withholding under Chapter 3 of the Internal Revenue Code. The default withholding rate is 30% of your U.S.-sourced royalties — meaning royalties generated from sales to readers in the United States.
If your country has an income tax treaty with the United States that covers royalty income, you may be entitled to a reduced withholding rate — in many cases, 0%. To claim that treaty rate, you must provide Amazon with two things: a completed IRS Form W-8BEN and a valid ITIN. Without the ITIN, Amazon cannot apply the treaty rate, even if your country has a qualifying treaty.
How Withholding Rates Compare for KDP Authors
The table below shows how the three scenarios compare for a non-U.S. KDP author whose books generate sales in the United States.
| Situation | Withholding Rate | Applied To |
|---|---|---|
| No tax form submitted to Amazon | 30% | U.S.-sourced royalties |
| W-8BEN submitted, no ITIN | 30% | U.S.-sourced royalties |
| W-8BEN with valid ITIN, treaty country | 0%–15% (treaty rate) | U.S.-sourced royalties |
Many U.S. tax treaties — including those with Canada, the United Kingdom, Australia, Germany, India, and dozens of other countries — set the withholding rate on royalties at 0%. For authors in those countries, obtaining an ITIN and submitting a correctly completed W-8BEN can eliminate U.S. withholding on KDP royalties entirely. Authors in countries without a U.S. tax treaty remain subject to the 30% statutory rate regardless of ITIN status, but the ITIN is still required to file a U.S. tax return and recover any over-withheld amounts.
How to Apply for an ITIN as a KDP Author
Most non-U.S. KDP authors apply for an ITIN under Exception 1 of the IRS rules — the exception that covers non-residents receiving U.S.-source passive income (including royalties) that is subject to withholding at source. Under this exception, you do not need to attach a full U.S. tax return to your Form W-7 application. Instead, you provide supporting documentation that establishes the royalty income and the withholding.
The application steps are:
- Confirm that your country has a U.S. income tax treaty covering royalty income and identify the applicable treaty rate.
- Obtain a letter or withholding statement from Amazon confirming that you receive royalty income subject to U.S. withholding and that an ITIN is required for information reporting.
- Complete IRS Form W-7 (December 2024 revision), selecting Box h (Other) and noting “Exception 1 — Royalty Income” on the dotted line. Also check Box a if you are claiming a treaty benefit.
- Have your identity documents verified by an IRS-authorized Certifying Acceptance Agent, by mailing originals to the IRS, or by visiting a U.S. IRS Taxpayer Assistance Center in person.
- Submit the complete package and wait for the IRS to issue your ITIN — typically 7 weeks outside of peak tax season, or 9 to 11 weeks during the January 15 to April 30 peak period.
- Enter your ITIN into your Amazon KDP tax information settings and submit a completed Form W-8BEN claiming the applicable treaty rate.
For a field-by-field walkthrough of every line on Form W-7, see the Form W-7 line-by-line guide published on nolly.com. If you are unsure whether your situation qualifies for Exception 1 or whether you need to attach a tax return instead, the guide on applying without filing a tax return explains each exception in detail.
The CAA Advantage for Authors Applying From Outside the U.S.
The identity verification step is the most common obstacle for KDP authors applying from abroad. The IRS requires either original documents or documents certified by an authorized source — a notarized photocopy is never accepted and will result in rejection.
A Certified Acceptance Agent (CAA) is an individual or organization that the IRS has specifically authorized to verify and certify identity documents on its behalf. When you work with a CAA, you present your passport or other accepted documents for review, the CAA certifies copies, and those certified copies accompany your W-7 application. Your original passport never leaves your possession and is never sent internationally.
For KDP authors publishing from Canada, the United Kingdom, Australia, India, or anywhere else outside the United States, this matters significantly. Mailing an original passport abroad introduces transit risk, weeks without a primary travel document, and the possibility of documents being lost or delayed in customs. The CAA route removes all of those risks. nolly.com’s team includes IRS-Certified Acceptance Agents and manages the complete application process — from document review through IRS submission — for authors worldwide. You can learn more about applying without mailing your passport before getting started.
Frequently Asked Questions
Does every non-U.S. KDP author need an ITIN?
Not necessarily — but without one, Amazon cannot apply a treaty-reduced withholding rate, and the default 30% rate applies to your U.S.-sourced royalties. If your country has a U.S. tax treaty covering royalties and you want to reduce or eliminate withholding, an ITIN is required. Even authors whose countries have no U.S. treaty may need an ITIN eventually if they wish to file a U.S. nonresident tax return to recover any over-withheld amounts.
Can I recover tax that Amazon has already withheld?
If Amazon has already withheld U.S. tax from your KDP royalties and you are entitled to a lower rate under a tax treaty, you may be able to recover the excess by filing a U.S. nonresident tax return (Form 1040-NR) for the relevant tax year. You need a valid ITIN to file that return. The 1040-NR reports your U.S.-sourced income, applies the applicable treaty provisions, and calculates any refund owed. Filing is the only way to recover previously withheld amounts — it does not happen automatically.
How long does it take to get an ITIN and update my KDP tax settings?
The IRS typically takes 7 weeks to process an ITIN application outside of peak tax season (January 15 to April 30), and 9 to 11 weeks during peak season or for applications submitted from outside the United States. Once you receive your ITIN notice from the IRS, you enter it into your Amazon KDP tax interview and submit a completed Form W-8BEN — the reduced withholding rate applies to payments from that point forward. Applying as early as possible minimizes the period during which the higher default rate applies.
Ready to Apply for Your KDP Author ITIN?
nolly.com prepares and submits your ITIN application — including Form W-7, identity document certification, and all supporting documentation. Our IRS-Certified Acceptance Agents verify your passport in-house so it never leaves your hands.
nolly.com is a private, independent platform and is not affiliated with any government agency. ITINs and EINs are issued solely by the Internal Revenue Service. nolly.com assists clients in preparing and organizing documentation and does not issue, register, or approve any government identification number. This article is general information, not tax advice. Individual circumstances vary.
