Hello, I have a question about author fee and tax. I sell item for 12 $ and I got form this price 1.70 $. Why ?
- you are a non-exclusive author = 55% author fee on your gross income of a sale
see: Fixed Byer Fees for Author Driven Pricing categories
- you don’t gave Envato any taxpayer infos about you = 28% US Backup Withholding tax on all your sales
see: Tax Information Form W-8 Requirements for non US-Authors
- List Price = Item Price + Buyer Fee
$12.00 - $2.00 = $10.00 (your gross income)
$10.00 * 0.55 = $5.50 (author fee)
$10.00 * 0.28 = $2.80 (US backup withholding tax)
$10.00 - $5.50 - $2.80 = $1.70 (your earnings)
All of these are required or I can expect something ?
Why do we have to pay tax in a country we’re not living in! It’s not like we’re using their free goverment services! This is bullshit!
Many countries around the globe have withholding tax on payments to non-residents
see : http://taxsummaries.pwc.com/uk/taxsummaries/wwts.nsf/ID/Withholding-tax-(WHT)-rates
most of them on revenues of a royalties/copyrights, so does the USA.
Envato decided to become a US registered company and therefore income of non-resident at the source (Envato USA Inc.) is subject to US withholding tax. If Envato starting a business in another country, then the withholding tax of that country would be charged.
If you want to sell here, you have these options:
provide Envato no taxpayer infos about you (no W-8 form submitted)
28% US Backup Withholding tax on all your sales
submit the W-8 form to make clear you are not a US citizen
30% US Royalty Withholding tax on US sales only
submit the W-8 form + your national tax id as foreign tax id
0-30% US Royalty Withholding tax on US sales only
the tax rate depends on whether your country has a tax treaty with the USA
List of countries with US tax treaty
Author fee and Buyer fee are always deducted, these are Envato’s income on a sale.