If you look at your statements page, you will see it took taxes from this particular sale.
Did you fill out your tax form?
If you did, then itâs possible the tax treaty between the US and your country does not prevent withholding tax in this particular transaction (buyer is probably from USA).
Envato would indeed give you about $76 depending on your author fee percentage, but they are legally required to take taxes where the law says so.
Backup Withholding Tax
If you are a non-US Author and do not provide a W-8, we are required under US tax law to treat you as a US Author and may be required to hold back 28% of your earnings and send it to the IRS. Refer to this article for more information on backup withholding taxes.
Royalty Withholding Tax
Generally, transactions in digital creative content gives rise to royalty earnings. If you are a non-US author, your sales to US buyers may be subject to withholding based on your countryâs income tax treaty with the US.
US tax law provides that the US government may collect taxes for US source royalty income. A royalty is considered to be US sourced when the sale is made to a person residing within the US.
To find out your treaty article reference & paragraph number, and applicable withholding tax rate you can view an extract of âTable 1. Tax Rates on Income Other Than Personal Service Income Under Chapter 3, Internal Revenue Code, and Income Tax Treatiesâ here.
You can view full the Table 1 on the IRS website here.
Yes,i never got charged for any taxes anywhere,hundreds of sales. At least 60% of those were from US buyers.
Still,it seems really unfair that the authors get the least amount of money, 50/50? More like 30/70 (20/80 for non exclusive).
We might as well be giving our music for free if the buyer is from US.
In this case actual author fee is larger than the amount i am getting paid.
Forgot to mention it also depends on who is selling the item. If the marketplace sells it for you, and then pays you a commission, you will not be subject to such taxes. Envato is opting to be more like Amazon where you sell the goods and they simply provide the platform.
Unfortunately, I donât see this improving here in any way. Envato wants their cut the same way they have since the very beginning, and Uncle Sam wants his cut too.
Ah, not necessarily! Itâs withholding tax, meaning you can potentially get it back from your local government (again, depending on its tax treaty with the US) when you file your taxes. Best to consult a tax adviser on this if you have questions.
At the very least, you can be glad this customer chose your item over the others on AudioJungle, and earned you at least something, right? Better than not selling the item here, thereby not getting the sale at all.
Yes i am glad someone chose my item,but i am also angry that two hungry sharks took all the credit for it.
39$ out of 152$? No excuse for that.
I will remove all of my music from my exclusive account as soon as i make another sale and get to that 50$ mark(or several sales from US buyer,4$$$ each),as i see no benefit of actually being exclusive here.
From what I understand, non-exclusive authors get 30% after everythingâs said and done. Exclusive authors get 50% - 70% depending on their lifetime sales value. (For example, Iâm somewhere around 55% right now I think).
So thereâs definitely an objective benefit to being exclusive (at least 50% vs 30%). Many authors donât think thatâs enough of a benefit, so they decide to go non-exclusive.
The tax issue sucks, but widtholding doesnât mean that the US Gov takes it and keeps it. You can file taxes at the end of the year and get the money back. Itâs hugely inconvenient, but they money is still yours. Thereâs really nothing Envato can do about that - itâs just the law.
Serbia has no tax treaty with the USA, if you have filled the W-8 form you have to pay 30% US Royalty Withholding Tax on your gross income of sales to US buyers.
$152.00 - 20% = $121.60 gross income ( $30.40 buyer fee ) $121.60 * 30% = $36.48 US Royalty Withholding Tax $121.60 * 37.5% = $45.60 author fee $121.60 - $36.48 - $45.60 = $39.52 net income
You could ask a tax adviser in your country if a tax credit for the paid foreign tax is possible when you file your tax return. A summary of paid foreign taxes you will receive next year from Envato.
