Nice research, and it does make some sense the information you provided. But there are some differences:
We are not US employees, we are not employees at all if you think about it. The info you provided may apply for the people who actually work for the envato company, but we are independent.
Envato must apply the rules for the respective countries, but only if it has employees there, we are not working for envato, we do not sign any contract with envato and we do not receive our salary from envato, we do not receive the benefits of an employee.
From what I see, the link you provided is the pay day requiremens of US employers, but again we are not employees and we do not have their benefits.
If the above law would be in fact applied to envato, then that would mean we all need to receive monthly payments (salaries) regardless of our sales, which is cleary not the case.
Agreed with you, but what I dont know and cant research is to what payment Laws are Envato obliged to comply based on the fact they have HQ’s in the US and Australia. Chances are local laws affect their payment schedule as well. This is quite a sensitive matter and as I said before, logically speaking, I doubt Envato wants themselves to pay more taxes and have more accounting to do… Wouldn’t you agree? Okay, we loose money, but I strongly believe that based on accounting costs and other taxes Envato are loosing much more. It would be illogical for them to pay more…
I’m basing my logic on the fact that if your company is based in the US or EU or wherever you want, and you outsource internationally, you still have to abide to the rules and regulations of your home country. What are your thoughts? See my logic?
It was 2 years ago. When Envato announced they had a HQ in the US they also announced they would have to comply to certain rules and regulations. I believe that post is here. Although you are right, there’s nothing to point a finger to, it’s quite obvious that there are tons and tons of legal issues that affect us as well that are related to the place of existence of Envato the US and Australia.
Yes, I understand what you are saying, but where I agree is that with the new rules they will have less accounting to do (the thing I just stated in my post above), the taxes are the same whichever rule they apply, because at the end of the day, their income and expediture are the same, wheter an author withdraws now or next year.
And regarding the rules, yes, envato must follow the rules of the country they are based in, of course. But again, these rules apply if you have employees there and provide certain services there.
For example, I have a company in my own country and offer web desing services both here and abroad. When a customer pays for my services, regardless if he is from my country or abroad I need to declare it at my irs and pay the same taxes, I am not forced to empty my accounts monthly or yearly.
If I work with an partner that is not from my country, I am not obligated to pay anything for him, I can send him the money and it’s his job to declare them or not in its own country (see the resemblence with envato?).
If I have an employee that works for my company, then yes, a contract needs to be signed and I need pay him/her monthly.
Not necessarily. SWIFT has margins for taxes. For example, in the EU, if you send less than 10.000 Euros, you have percentage X, if you have more than 10.000 Euros, you have percentage Y, therefore, let’s take author John Doe.
John Doe earns 2500$ lives in the EU, he waits for 5 months and withdraws via Swift 12,500 $, which are let’s say 11.000 Euro. To which Envato charges him 25$ for SWIFT, and they actually get charged 35$. Now, multiply John Doe by 100$, and you start loosing money.
That would depend. We pay Royalty Tax to the US, we as authors have no employees there… so it’s not hard to imagine there might be a case where this situation can be translated to money payment times.
Same applies to my country, only I have to attach a bank statement with that money. Therefore, having them in PayPal in 2018 and declaring that I made XX.XXX using Envato’s invoices in 2017 would translate to tax evasion here. There are small things here and there, little legal matters that have massive ramifications.
Same here in my country, but although we have a resemblance to Envato, imagine going to your accountant and saying “Hey, I have 2.000.000$ in my account. I’ll have to send them out, don’t tax me for them, I just don’t know when my 27.000 partners wants them”
Because, the cash buyers pay Envato, goes in an Envato account, and Envato pays taxes for money they’re basically just keeping for us. Which again, a tone of extra paperwork, extra money lost.
This is what I see personally, is happening. Might be right, might be wrong. As freelancers, yes I see the resemblance with Envato, the only difference is we are 1 Author and 1 Partner. They are 1 marketplace, 30.000 authors or more and 7.000.000 total buyers, therefore, I’m thinking accounting wise, that’s a complete nightmare compared to us.
A paper boat and a aircraft carrier both float, but that’s about it for resemblance, we’re the paper boats, Envato is the Aircraft Carrier!
We think that to avoid the guessing contest and confuse even more authors with “could be’s”, “maybe’s” or laws that maybe don’t apply, the best thing would be to just ask
@jamesgiroux Can you please confirm if both the prohibition of split withdrawals and the obligatory monthly withdrawals are because of some law that you have to abide or not? Because in all the posts you keep saying “our system” or “our terms”
or in this quote, that you say that this decisions/changes were made them by you with the best intentions in mind, not to abide some rule or law.
And, like other authors have pointed out, seeing that there are currently other big US based marketplaces that don’t have this restrictions it would be really helpful to know.
Well, firstly, in my example I was talking about envato’s payment to authors, not about John Doe’s percentages, it’s his business how much he loses if he wants to withdraw 11.000 euros instead of 1000. Bottom line envato should not force him to withdraw at 500.
Secondly, we do pay taxes to the Irs in the US, but you recover those percentages from the irs in your own country. We do not pay for health, social, pension or others to say that envato is forced to pay us monthly and we are not forced to pay them every month so you can justify forced monthly withdrawals.
Thirdly, you have a point there and it’s the conclusion I was already talking about. This decision helps them when it comes to accounting and complicate the author’s lifes, that’s what I’ve been saying all along.
We could talk a lot about this, but there is no point to each coming with it’s own theory, until someone confirms or not our theories, let’s agree to disagree.
As Odin_Design says, @jamesgiroux can confirm or infirm if this decision is a selfish one or they are forced by some entity to take it. And answering the question will be helpful to other authors by knowing in the future where they stand in the eyes of this marketplace.
Agreed. Then how about percentages of your withdrawal. 25$ up to 1000$, 100$ up to 10000$ and so on. Come on mate, you have to see the logic behind this and not having a threshold.
Got that, and agreed. But Envato is not a bank. So if they hold your money they have it stored in an account, accounts get billed. Taxes are included, and account “maintenance” fees usually depend on the amount of $$$, so Envato by holding 1234 they pay A% by holding 12345 they pay AA%. That’s not a healthy step for them if there are authors that withdraw once a year and Envato gets slammed with the “holding costs”
I’m 100% agreeing to disagree until further confirmation ( if ) it’s given!
This has already been discussed countless times, you can’t possibly believe a company like Envato would do that. The backlash would be insane. “Selfish” companies are a thing of the past, they die out pretty fast. I’m fairly certain this is a business ( see my point about holding money and paying for money that is just being held for no reason ) and legal orientated decision.
That may be true, but it would be biased. Because withdrawing to PayPal or Payoneer = 0 Transfer Fee, that would mean Envato is only targeting Swift’ers … again, simply doesn’t add up to this being a “selfish” as you called it move.
It’s a business and legal strategy. Looking at it from a “cold perspective” not the one of an author it is pretty obvious. If I look at it as an author I can clearly see the frustration it causes, but again, you can’t blame a huge company for not wanting to pay taxes for keeping your money which you decide to leave hanging with them, and you can’t blame them either if it’s a legal matter.
It’s something we have to, well … adapt to … SWIFT will be a unpleasant experience, that’s a cold, hard fact! Cheers mate!
Well, seeing that since the topic opened people are asking, wondering or guessing, it will certainly help keeping things to go off-topic. The last 10-14 replies have been authors trying to guess or linking laws that may have nothing to do with this. So if they can set the record straight and avoid more confusion for authors (both the ones that are currently active in the topic, and the new ones that have to sift through all the replies) it would be really helpful, don’t you think?
I’ve been the only one researching these laws and posting links. I haven’t seen anyone else post anything, yet, everyone points to how it’s impossible for this to be a law, or a reasonable business decision based on previous comment.
I think the same, but consider the following facts. If this is a law, our knowledge of this would be to vague to understand the legality behind it, sure, we can Google and get a vague set of terms, but not enough to understand the complete and full ramifications, so chances are it would most likely cause more confusion and more “over-night Google lawyers” to start throwing assumptions, and start calling a legal team that backs up a huge company incapable based on their 5 minutes of “Being a Multinational Lawyer for Dummies” course on Google. Remember the massive experts that appeared overnight in the VAT and US Royalty thread? Everyone was a specialist, everyone was a lawyer, the trolls, the anger, the rage, the hatred that generated was incredible, and yet, it is all legal, and more and more companies are forced to abide to that international law. Yet panic and anger was the main course of those threads. That came and went, we’re still here. Moving on, if this is a business decision we will never get a confirmation, and the reason is quite clear. Envato would have to divulge earnings / costs / maintenance / bank information to everyone on the forums, and although a company revenue can be public, internal matters will never be shared with the general public, the reason are quite obvious.
So although I’m curious as a cat to find out what is happening, I can understand that these things may not be revealed to us and can be simply named “aligned to our terms”. Indeed, we are speculating, and not getting an answer leads me to believe that these 2 scenarios are the most plausible. It’s a international law, and by keeping it at the " these are the terms " Envato is avoiding the massive backlash of speculative trolls starting to point fingers left and right with absolutely 0 legal knowledge causing unnecessary panic, confusion, or it’s a business decision, in which case I’m not even bothering to get an answer, and understand that Envato must have weight the pro’s and con’s of such a decision and have taken the best course of action for both them to cut losses and us to not take the full blow-back.
It’s quite a tricky situation, and the easiest thing in the world is to say “Envato doesn’t care”, while, if you step back and look at it from my perspective, it will tend to make much more sense.
Want a better example? Check the top part of this thread. James announced that withdrawals would be automatic. A few unnecessary posts later, everyone started asking what will be the fee… what fee?! People that use PayPal and are in no partnership have asked why there will be a fee… the amount of confusion a thread like this causes if left unattended and speculations start is staggering.
I hope you understand now why I asked how would this help? It would indeed give a method to the madness ( famous quote ) but in no way would it give a solution. What is happening in the announcement is the solution to something that can be a law or a business decision, of which we can do nothing about. So why then, bother to speculate and start pointing fingers? We won’t change anything after all since it was announced for almost 2 years to begin with!
This was just an example to go with the “speculating or guessing” that authors can make, on previous posts or on future ones, not just you particular case
Yes, but again, regardless of all that, it will end the discussion of “was it or wasn’t” or we’re going to have our own “the chicken or the egg” for the next 100 posts
that’s what we are saying! it will end the speculation!
If this is something Envato can talk about you can be sure James will answer, if not, then we just have to accept the fact that this is not intended for Envato to self-destruct and basically commit financial suicide by targeting their income… us! Cheers mate!
I thought the same with the VAT and US Royalty Tax, and as I said, everyone started becoming an instant lawyer after 5 minutes of Google.
We’ll wait and see what the staff say regarding this! That’s all we can do! I’ll be around this thread a lot to keep it as much as possible on topic and keep discussions well mannered.
Hi again,
I’m thinking, maybe will be better if you can rise procent from earning and in this situation, users can pay taxes and Envato will be happy with this new rule…
eg : abc@mail.com is my envato mail id - xyz@xymail.co is my paypal or payoneer account id. can i use like this ?
or it must be abc@mail.com for envato account and all payments ?
I’d be surprised if your payment email address has to match your email address registered with Envato… but I’m sure James will clarify in his next round of answers.
I don’t think so this is the case. Actually this will work like this. Correct me if I am wrong.
For example your name is Adam. The account owner should be Adam as well no matter what email address you use.
If you are the account holder.
You must have your payoneer registered in Adam name which will be connected with Envato account. No matter which email address you use with payoneer or Envato.
For more security, I think better to use different email id’s for Envato and payment method? Will it be allowed? If owner of Envato, tax, PP accounts will be the same as requested.
I’d also like to know. In the case of PayPal withdrawals, what will be the info that needs to coincide? Because if this is an automatic process and we have one typo then we get payment rejected…
