Hi everyone!I am an exclusive author from Azerbaijan. Yesterday i had my first sale to US person. Cost of my item is 8$. After all taxes my income was 2.21$. I don’t totally understand how much % envato take from each sale from an exclusive author, and how much % subtracts for taxes, because i am as non US person sold item to US person. Please help me with this. There are too much information on envato. I read it, after this everything became more complicated and now i am more confused.
help me please
The facts:
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Envato has no foreign taxpayer information about you (you have not filed the W-8 form in your account settings). You are now treated by Envato as US author without any taxpayer informations = 28% US Backup Witholding Tax on all your sales.
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Your exclusive author fee rate is currently 37.5%
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The list price includes the item price and 20% buyer fee
Your gross Income is the the list price - buyer fee.
This gross Income is the base on which you must pay income taxes and the author fee.
List Price: $8.00
Buyer Fee: $8.00 * 20.00% = $1.60 paid by buyer
Gross income: $8.00 - $1.60 = $6.40
US Backup Withholding Tax: $6.40 * 28.00% = $1.79 paid by author
Author Fee: $6.40 * 37.50% = $2.40 paid by author
Earnings: $6.40 - $1.79 - $2.40 = $2.21
If you submit the W-8 form (via account settings) with your local tax id from Azerbaijan as foreign tax id, then there will be no US income taxes on further sales, because Azerbaijan has a 0% tax treaty with the USA.
Thank you for short and clear answer!