Do I have to pay tax twice?

I’ve just made a sale $19 (US), Yeeha… I end up with $5.24… Oh!

I’m in the UK and will have to pay tax again!

Ok just found a link for this…
so is it worth staying with AudioJungle or… what are the options/thoughts?

Have you filled in your W8? This is worth a look if you’ve not yet read it…

Basically, the UK have a tax treaty with the US, so you fill in the W8 form with your UK tax ID number and you won’t have any taxes withheld.

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No I haven’t, I’ll look it up.

Can someone explain why $19 (sale) becomes $15.20 (gross) before

US Backup Withholding Tax and author fee are taken out?

Thanks

The buyer fee. It’s 20% of the list price (the amount the buyer pays). The amount left, the $15.20, is the item price.

if you add a uk tax number you have no tax witheld but without a tax number you do. can someone explain why this is so?

Well you’ve got to pay tax somewhere, so I guess the IRS are thinking along the lines of “Well if they’re not paying tax in the UK, or they’re not from the UK… or it appears that way, then we may as well have the tax instead. Ta very much!”.

if you do not fill in the form w8, envato considers you a usa resident and you get taxed, if you do fill it in, your considered a non usa resident and your not taxed., so now if you add tax number from uk, you get the treaty, if you dont add tax number you do not. none of it makes sense at all. one big con and to top it off, you dont get tax back if you add details sometime later.

to clarify if you can, why does adding the tax number get you the treaty and not applying one does not after envato already except your from the uk by way of w8 and can someone expalin what the hell is a buyer fee. who gets the 20%?
enavto gets 50% plus 20% buyer fee plus we pay there tax? i mean wtf?

You pay your taxes, Envato pay their taxes. The buyer’s fee does go to Envato, but that’s included in their 50%… it’s not 50% and 20% as well. As for why you have to enter a tax number, if the IRS are going to miss out on a bunch of tax that they could have got from you, then I guess they want something a bit more official than just taking your word for it. UK residents are allowed a tourist visa when they enter the States, pretty much no questions asked, but you’re still going to have to show your passport.

I guess filling out the W8 is just to show you’re not a US taxpayer. It’s only the tax ID part that brings the tax treaty into play.

As for not getting your tax back… I’m not sure about that one. You might. In theory, you can take the document that Envato will give you at the end of the year to your tax office so you don’t get taxed twice, and the amount you’ve already paid can be deducted from what you owe. On the other hand, they could say “well you should have put your tax number in to start with, so you didn’t get taxed anything by the US”. They might, they might not. Time will tell.

How do I proceed with this W8 form?

If I add my tax number onto my account (is this possible) will the US Backup Withholding Tax not be taken out?

You explain things well and i think and out of all the mod’s on here your by far the best. you say things as you see them , not what sounds best for envato. well done :wink: but im sure deep down you believe this tax stuff is bit out of order, i hear the whispers round the internet and envato’s name is being drag through the dirt but they act like they dont care and im sure they dont. lucky i did this for fun and do not need money as i have already :wink: but ofc i will not be uploading ever again

I used my NI number, but there is no confirmation from envato when you submit the information, so you don’t know anything until your tax bill arrives.
I’ve decided not to use envato until this crazy tax system is revised, this seems to be the first incarnation since the move to the US, it’s a mess and the only people benefiting are envato.

If your UK based you don’t pay any taxes unless you earn above £10,600, someone needs to inform the IRS of that, they are taking what isn’t theirs.

Go to profile… settings… tax information, and complete the form there. Use your UTC or NI number.

Thanks! Although I’m pretty new as a mod, and like any new role, it’s all enthusiasm and helpfulness at the beginning… give it a few months and I’ll be deleting people’s accounts if they look at me funny. Just kidding! Or am I?! :smirk:

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You’re nearly right, just a slight alteration required…

“If your UK based you don’t pay any taxes to HMRC unless you earn above £10,600”

Why is their no confirmation when submitting your information in the W8 form ? Where is the receipt for the information and the acknowledgement from envato they have all the info they need and you won’t be hammered with the 30% ?

The tax agreement the UK have with the US doesn’t cover that ?

Yes and no. No because the withholding amount isn’t affected by tax thresholds, tax bands and allowances and all that jazz. No tax ID, no tax treaty. No tax treaty, then 30% on all US sales… no matter what you earn.

And yes because if you fill in the W8 with your tax ID, then you won’t get anything withheld, whether you earn £1 a year or £100,000 a year.

(That’s UK specific advice, just in case anyone else is wondering)

The IRS don’t care about any tax threshold in a specific country. If you make income on a US source, this income is subject to US withholding tax. You sell an item to a US customer, the transaction is handled by Envato USA and the item price is your gross income on a US source (Envato USA Inc.)

The United Kingdom has also withholding taxes on payments to foreign persons, for example if a performer from the USA plays a concert in London and will be paid by the organizer, he has to pay the UK withholding tax.