Calculate partnership profit Problem

Hello ! I have partnership with author, and we have some problem with calculate profit, we have partnership 50/50.

My partner send to me a screenshot from own portfolio tab, showing to me profit from item, but when he calculated profit i see the amount is smaller what would be the counting of income using data from the tab portfolio.

I asked why the difference profit, and that’s what he says to me:

He send to me statement money receive file . CSV can check file csv i sent you can check, statement money receive, with money show like screenshot it is diffirent. Because fee usa tax, i calculate from file statement csv amount with excel.

i have sent you file statement csv, you can check profit in it calculate in monthly can not use money in portfolio with sale usa minus 30% by tax.

He tells me that he received less money than shown in the portfolio with my theme.

We have entered into a partnership 50/50 and I want my part profit of it, not less.

Please tell me how to solve this problem ?

If the buyers is from USA, there’s additional tax they you’re paying ( up to 30% ) That could be the reason

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I thought amount in the portfolio with product not specified after deduction of all commissions, or is it not so ?

If you sell the item for 49$, you’re not earning 49$. Depends on your commission rate, your partner would get 24.5$ in total - means per item you’d get 12.25$ but in case the buyer is not from USA ( also depends on your partner’s country but there may be additional taxes )

At what stage is charged such a commission ?
You are faced with a similar situation, when the amount of sales will otlichaetsya from the amount you received on your wallet ?

Search the forum for U.S hold tax. Are you from UA?

Hi! this amount is reflected net of fee usa tax ?

The most important question is ‘50/50’ of what? If that wasn’t specified then that’s your problem right there… it could be 50/50 of the item price, the list price, the amount after fees, the amount after wages are paid, after expenses, support, based on EBITDA etc etc.

If what constitutes 50/50 isn’t what you were expecting, them you either need to renegotiate, or cancel the agreement.

Anyway, I’ve thought it through and the only way you can do it so it’s fair from a payment and tax point of view, is to set up a company together, with the both of you as joint owners. Otherwise, he’s paying his 30% tax and you’re then still liable for additional tax on that 50/50. The 30% is income tax which he is liable for… and the remaining 50% you get will also be liable to income tax, which is slightly unfair.

But if you own a company, then that 30% is the total tax liability of the company, and you’re free to split the remaining 50/50. However, setting up a company between two people in two different countries isn’t going to be a walk in the park… and you’d have to decide which country it is registered in… which will alter your tax liability.

Hello! Thank you for your answer.

My terms with partner written in the contract (support ticket) :

Profit with template 50/50

Profit on product is displayed in the tab portfolio with the product, i’m right ?

The profit of sales with the product on tab portfolio: Example -
This amount is reflected net of fee usa tax ?

On my portfolio that part shown the amount before US tax, the only way to know how many US buyers is just accessing the statement tab.

I’m not paying any US tax but as far as I know, the profit that on the screen is how much he gets. According to the screenshot, you should get 143$ ( depends on the transfer method e.g minus %3 for PayPal )

I suppose the question would then be 50/50 of the pre-tax profits or post-tax profits? The thing is, if the guy gave you any more than he is currently, then he’d be getting less than 50% of the post-tax profits. The only way for it to work fairly, for any marketplace partnership where the sales involve withholding tax, is to set up a company together… which probably isn’t worth the hassle unless you have a lot of sales.

And I’m pretty sure the amount shown on the image is the gross profit, before taxes are subtracted. So yes, it could be classed as profit, but that depends on how you define profit. Profit, as a general term, is rarely defined as gross revenues, or gross revenues minus taxes.

One thing to note, which I’ve covered already, but it’s probably the most important point: By paying you after taxes, that means that you are paying 50% of his withholding tax. If he’s registered as an individual, then that’s classed as income tax, which is applicable to him and him only. There’s nothing wrong with an agreement where you pay a percentage of his taxes… but by paying 50% or even 100% of his taxes, you’ve still paid 0% of whatever taxes you should be paying… so your 50% after taxes is actually 50% before potential additional taxes.

I don’t think you’re going to be able to come to a mutually beneficial agreement on this… as I say, if he gives you any more, then he’s getting less than 50% of the profits after tax.