I think it’s pretty fair to say that lately we’ve all felt an emotional disturbance by the new taxes being applied from US buyers. I must say that the Envato sites offer quality, they cares about improving in any field, BUT, the new taxes will shortly kill every composer around here.
Not long ago I happened to sell this package, that costs $28, and I got around 7 dollars of it (around 25%). This happened to me, and to a dear friend of mine here, who is a serious composer and music teacher. We’ve agreed that we are on the edge of quitting uploading music on Audiojungle, and I felt that this topic MUST be discussed here.
To the Envato staff - You need to take care of this problem very, very soon, as a lot of great artists and musicians who’ve spent a lifetime learning music are on the edge of quitting as they find the truth. You can work on the design of the site, on the forums, on better technical support, but if you don’t work out this problem, you’ll either stay without quality musicians, or you’ll make Envato’s forums filled with hate and anger.
People, freely discuss this, as we need change here. Audiojungle deserves better.
I feel your pain but looks like not the taxes nor new search engine won’t decrease the number of authors. Look at the current review queue…Its even more than ever before.
Looks like Envato has a bigger problem. We can hear some explanation, as we’ve previously heard, but what we need to hear are practical, constructive solutions!!!
Yes unfortunately I think the only thing you can do is quit this market and/or use other markets. Envato has already made it’s choice in moving operations to the USA and in the way it decides to conduct it’s transactions and bill authors. Personally, I’d like to see Envato do many things differently - for example 50% commissions for non-exclusive authors, individual pricing, ect - but at the end of the day they are going to conduct their business however they see fit, and I seem to recall some responses from Envato a long the lines of “if it doesn’t make sense for you anymore it doesn’t make sense for you anymore.”
More to the point though, even if people were making $0.50 per sale, I think there would still be a market, because in music there are always going to be people willing to work for less and less and because music is the most heavily saturated market in the world. But again, the best thing musicians and composers can do is to use the markets or platforms that best suit them, or maybe start their own market or sell directly to customers.
Expanding operations is more correct, but what are these tax benefits you speak of? As far as I understand the situation, US and Australia have a tax treaty that exempts personal and business income unless the business entity has an established presence in either nation. Thus by establishing a US office, Envato will likely have to start paying some of it’s income (from US transactions) to the US government and applying for the appropriate tax credits in Australia in order to avoid double taxation. But remember, Envato doesn’t pay taxes on income from sales, because the way Envato is set up, they make their money from billing authors post sale and buyer fees. This is why the author without a tax treaty ends up paying taxes to the US government on the sale, not Envato, although it is hard to see the difference because Envato is essentially doing everything for you and automatically. Envato acts as an agent for the author/seller during the transaction and “credits” the author the cost of the sale and then takes their percentage, the only thing that has changed is that Envato now also collects and pays the proper income amount for non-US authors or people living in a non-treaty country, because, Envato now has a US presence and therefore as an agent they can be held liable for paying applicable US taxes on income if individual authors choose not to. Essentially the only income Envato would be paying taxes to the US government would be on the percentage they bill their US buyers and sellers, but they’d still be paying taxes to the Australian government, they’d just have to file for tax credits or whatever the procedure is. Whether or not that produces a tax benfit for them I have no idea, but I do know that US corporate tax rates are higher than Australian tax rates after $75,000 or so, so they’d need some pretty good Australian tax credits to end up paying less in taxes…unless of course they choose to establish their US branch as an independent company and keep all their US profits in the US, in which case they’d definitely end up paying more.
The taxes are lower in Australia though… so if it was some cunning plan to pay less tax, they should have moved to the Bahamas or something, rather than the US.
Well that’s the real question isn’t it. They say they are expanding to better service US buyers, handle transactions…in a digital marketplace? Perhaps. My speculation would be courting US/Silicon Valley investors and/or pitching themselves to giant tech companies, but who really knows…
They say they are expanding to better service US buyers, handle transactions…in a digital marketplace? Perhaps. My speculation would be courting US/Silicon Valley investors and/or pitching themselves to giant tech companies, but who really knows…