Envato Needs to re-work affiliate program

Envato Authors Affiliates
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#1

Howdy

I think envato might want to re-work the affiliate program. Envato Market is the only website on the internet that claims they will send the taxes to the government for you. But remember, we have write offs and deductions on those earnings plus envato really has no standing to make these decisions… Governments do not care about envato, in the end it will be the IRS asking ME for the money, not envato market. So why does envato have tax withholdings? Well, i dont want to rely on that if im pulling in 50k in commissions a year. Thats a really bad way to do business. In fact, it would be flat out stupid for me to rely on this.

Its not really envato’s position to play government and send earnings to local governments because there are deductions available for their earning, especially being based in Australia. Not to be mean, but USA has much higher standards and rules than Australia. Even though i made commissions, i refused to give envato my social because they dont need it.

I would really like to promote some of these themes in the future. I get emails from authors all the time. I hope you guys understand this post. In the end, everyone wants to make money and provide good content. We are all here to help others and make money! But the structure of this program really hinders that. I hope you guys in the future will change it.

#2

@darrel03
Thanks for your forum post, we appreciate all feedback always.

Envato is legally obliged to withhold taxes on behalf of and report earnings to governments (e.g. (US with withholding tax and EU with VAT). It has been referred to as Amazon Tax. Despite being incorporated in Australia, if we generate sales to US buyers then the US law applies and taxes must be withheld. Similarly for the EU.

While Envato is compliant, we are pioneering this work in our industry and appreciate these obligations are new to many of our valued affiliate partners. I hope this has provided clarity. We would be more than happy to work closer with you so please feel free to reach out to us to discuss how.

Regards,

Envato affiliate team

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#3

Well this is a bigger problem. First, the affiliates arent selling a product. This is why affiliate compaines do not withhold tax.

Second, if you are charging 2 sales taxes on 1 single product, this is double taxation on a single product
Affiliates do not sell anything, but are required to report all the earnings to the local government. Again, envato is the only website ive seen that does this. No other. Because again, affiliates arent subject to this because they dont sell anything, we dont need a sales permit or a license

Welp, we are aruge this for days, but you may really want to look into this. Im almost positive this is incorrect.

#4

Hey @darrel03,
Keen to clarify this to a point you are comfortable with and believe the following should achieve that, taken from our offical statement on this.

Backup Withholding Tax

If you are a US Affiliate, and do not provide accurate tax information, we may be required to hold back some of your earnings and send it to the IRS. Effectively this is paying part or all of your income tax upfront, and you’ll simply take credit for this amount on your regular tax return for the year. Please note that high net worth persons are subject to a tax rate in excess of backup withholding and may owe additional tax on their income.

You will not be subject to backup withholding on payments you receive if you provide your correct TIN and make the proper certifications. Backup withholding is 28% of the total value of your sales or any referral earnings you have earned.

Any tax withheld will be remitted to the IRS – and not held by Envato.

Most US taxpayers are not subject to backup withholding and won’t have to worry about it applying so long as the US taxpayer provides a Form W-9. So, if you are a US Affiliate, please correctly complete your details as soon as possible to avoid backup withholding - Complete your tax details here.

Please ensure that your taxpayer identification number (TIN) and name on the form are correct and accurate, according to IRS records.

Hope this provides clarification if not don’t hesitate to contact us
Regards,
Envato affiliate team

#5

“if you are a Us affiliate and do not provide accurate tax info”. -What? How would envato even know this? This is NOT your job.

“Any tax withheld will be remitted to the IRS – and not held by Envato.” - Opinion, Non Binding, Not envatos job

Lol i give up, I didnt know envato was the IRS. Just lock the thread. This is just troll bait at this point. Get a new accountant for sure, envato is the only one on the internet with this kind of " we take the tax out for you" kind of affiliate program lol.

#6

It is their job, they’re not doing it for fun. They’re a US based company that have to comply with the IRS rules relating to withholding tax, which is what they are doing. You may have heard of a company called iTunes, and Kindle Books, The World Series of Poker, iStock… they all do the same thing, to name just a few.

If a company isn’t withholding tax then it means they’re not based in the US, or they are based in the US and they should be doing it, but they aren’t.

If it wasn’t Envato’s job to collect and send the money to the IRS… I’m pretty sure the IRS would have got in touch with Envato and told them to stop sending them a bunch of money every month or so, for no apparent reason.

You’re welcome to not submit any of your details, but Envato need that information to know how much they should or shouldn’t be withholding.

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