So I’m a Canadian author looking to sell books in a domestic and international, largely US, market. ‘How the heck do I do that?’ was the first question that popped into my head over a year ago when I started to get serious about publishing and selling my book. Finding the answers to that question was a long process, and I am finally beginning to see light at the end of the tunnel.
At first I thought, ‘How complicated can it be?’ I mean, hard copy books get sold on Amazon and similar distribution sites all the time, right? So what’s the big deal? Well, what I’m talking about today is a little different. See, my publisher will be handling those sales and the resulting distribution. What I’m talking about is selling books on my own (which is where I have the potential to make the most money). While researching this, I found there are some important things a writer who plans to import, sell and distribute his or her own books should know before forging ahead. Now, bear in mind that the info I am going to share is specific to the Great White North, but I think the point is that anyone looking to sell books in an international market should do their research to make sure they cover all the bases to avoid unpleasant mistakes. Like this one (which is important to know even if you are selling/distributing via Amazon/Kindle/Kobo, etc.):
1) I don’t have an ITIN: Do you know that without an ITIN (Individual-Taxpayer-Identification-Number issued by the IRS) the IRS can retain 30% of your royalties? Granted, you can apply for one later and then claim your lost amounts, but why go through that hassle when right from the start you can collect all the money from your sales?
About the ITIN: The following is taken straight from the IRS site:
What is an ITIN?
‘An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service.’ ‘…IRS issues ITINs to individuals who are required to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain a Social Security Number (SSN) from the Social Security Administration (SSA).’
What is an ITIN used for?
‘ITINs are for federal tax reporting only, and are not intended to serve any other purpose. IRS issues ITINs tohelp individuals comply with the U.S. tax laws…’ For our purposes, the second half of the paragraph is actually the most important in regards to non-Americans: when you apply for the ITIN you identify the treaty agreement between the US and, in this case, Canada which exempts you from having your royalties plundered. That is why this step is so important. (Please note that as of January 1, 2013, there have been changes to the ITIN application process etc., so visit their site to get more information). Below are links to the IRS site:
Info doc: http://www.irs.gov/pub/irs-pdf/iw7.pdf
2) Oh no! I have to import books!
Great. Got my ITIN so now I’m ready to roll, right? Nope, not yet. Maybe you’re a Canadian author who was lucky enough to find a publisher in your home town or somewhere across the country. If that’s you, awesome! In my case, my publisher is located in the US so in order to sell my books, I have to import them. ‘Oh Lord, how do I do that?’
Here’s what I did:
1) I started by looking up the Law on books and book selling. There is a lot of useful information here (ex. selling internationally, producing Canadian editions, guidelines for book distribution, etc.) and the legal language isn’t too hard to follow. But best of all, there are guidelines in it for pricing books produced in the US, which is something I was concerned about. The document can be found here: http://laws-lois.justice.gc.ca/eng/regulations/SOR-99-324/page-3.html
2) That done, I called Customs Canada http://www.cbsa-asfc.gc.ca/menu-eng.html and discovered that for my province, Quebec, there are no duties/customs fees to pay, only the 5% GST based on the estimated value of my merchandise. This can change depending on where you live, so you’re better off calling first to avoid unpleasant surprises.
3) Last, I contacted Revenu Canada because Customs Canada suggested that in order to bring books across the border, I might need an import account, and to get that meant I needed a small business number. Rev Can confirmed this and also informed me that whether I was selling books as a hobby or for profit, income is income and I would need to claim my sales as such. It literally took 5 minutes to register for both numbers. Considering how many problems I could run into without them, I figured 5 minutes on the phone was worth it.
Here’s a link to the Revenu Canada site, where you can get information on importing goods, small business numbers, etc. http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/gnrl/txbl/mprtsxprts/mprtdgds-eng.html
Now, this is the path I chose. I’m a planner at heart and always do my best to cover all the bases before jumping into anything; I hate nasty surprises. My goal today was not to tell anyone what to do but to put the information out there in order to help others make the best decisions they can in relation to their situation. Hope it helps!