Important Changes for Non-US Authors/Affiliates/Service Providers

But makes me wonder, why we don’t pay taxes for every country our costumers came from. Sooner or later some other government will ask for they piece of cake from authors(or buyers) and this will probably open a door. I am just so glad that after VAT changes I started to focus on freelance jobs…

There exists chances for such happenings but as major part of sales happen in the US,the impact is high with US Sales.

Just a friendly reminder to keep the thread on topic, i.e. only questions about the “non-US Author/Affiliate/Service Provider” changes

Hi. I’m non-US author. In the W8 form I can put U.S. Social Security Number. I’m a bit confused after reading this natman’s post. She said I can put either Foreigner TIN or ITIN, but nothing about SSN, although W8 form has option to set SSN. Please clarify.

PS: My country is in 0% list.
PS2: I have SSN.

Important for romanians about W8-BEN. We can deduct the 10% of our income tax. I detailed in this post. We do not lose anything from our sales in U.S. .

The question is: Envato will provide a document that will pay this fee for us at the end of the month or year ? We have need this evidence for the authorities in our country to deduct the 10% from our income taxes of U.S. sales.

@collis I’ve sent you an email, it’s VALUABLE information before you go to USA, strange things happens…

Hi kh2838, thanks for raising this! After speaking with our tax advisors, we can confirm that you will need to include a signed letter or document from Envato, on official letterhead, showing your name and verifying that an ITIN is required to make distributions to you during the current tax year that are subject to IRS information reporting and/or federal tax withholding.

We’re in the process of preparing the letter now and will make it available on our help center within the coming days. We’ll also let you know here once it’s ready.

@mattosada, hopefully this answers some of your recent questions as well :slight_smile:

One of the reasons we initially split (bifurcated) the support price out was we were deciding how this payment would be treated. Unfortunately the US RWHT will be applied to the full Item Price (including the included support). However subsequent extension purchases will have no US RWHT applied.

As some of you may recall, earlier in the year we ran a direct credit card test on Envato Market and the results were promising though with a lot of things to work through. We’re now working to roll that out permanently with US providers behind the facilities for US Buyers, to combat issues like card decline rates. Following this rollout we’ll move to other US payment options such as ACH.

Our initial step into the US is focused on payment options, subsequent activities are mingled with our future strategic roadmap, so for the benefits of being closer to buyers, you’ll need to wait and see :slight_smile:

Hi halfdata, on page 6 of the Instructions for Form W-8BEN it says, “To claim certain treaty benefits, you must complete line 5 by submitting an SSN or ITIN, or line 6 by providing a foreign tax identification number (foreign TIN).” Our understanding is that either is OK, but I recommend checking with a local tax advisor to be sure.

Correct - the W form details must always match the account owner details.

Hi Sonicbyte, unfortunately not :frowning: With the new withdrawal rules, your payment account country must match the one on your completed W-8 or W-9 form.

Hi MikeSea, if the information you provide on your W-8 Form is true, correct, and complete, and you are in a country with a treaty rate of 0%, we won’t apply US RWHT on any of your sales.

Yes, if you have a tax number from your own country and want to claim tax treaty benefits, please enter it in the “Foreign Tax ID” field on the online W-8 Form. Alternately, you can apply and get a US number called an ITIN (Individual Taxpayer Identification Number). If you’re not sure what is the right number in your country, talk to a tax advisor or accountant.

You can withdraw your earnings at any time (with the caveat that withdrawal rules are more limited from January 1st to once per month). However if you don’t complete a W-8 or W-9 form, then after January 1st any 2016 sales will have Backup Withholding tax of 28% applied.

As @xFrontend said, when you submit our online form, you’ll see a confirmation message to let you know submission was successful. Our online form also has built-in validation rules and sections that must be completed before you can submit. That said, you are also required to certify that the information you’ve provided is true, correct, and complete, and acknowledge that there are severe penalties for providing inaccurate or incomplete information. In doing this, you personally are responsible for confirming that the form is valid.

Unfortunately we did attempt to scope a joint revenue sharing system like you describe and it was a hugely complex project because of the complexity of our financial systems. So unfortunately we won’t be creating such a system in the foreseeable future.

Here you go, surjithctly!

  1. Your statement will be updated to show when taxes are applied, and the amounts withheld

  2. Unfortunately I can’t help with the first question here - you’ll need to contact a local tax advisor about this :slight_smile: On the second question, at the end of the year we’ll provide you with a Form 1042-S showing your total US sales and any WHT deducted.

  3. We are working with all of our payment providers to make sure there is no double reporting.

  4. We’re always reviewing how pricing and fees work at Envato, and will keep this in consideration.

Good call, Bedros! We’ve updated our form so that ITINs and SSNs are not bundled together and also added a separate field for people who can’t or don’t want to provide a tax identification number. Thanks for the suggestion :slight_smile:

Hi Allegro, Envato’s online “Tax information” form and the IRS’ Form W-8BEN are one and the same. You only need to complete one, not both.

Hi Bedros, when you complete your W-8 form if it’s validly completed, then we will apply the right treaty rate! I’m sorry about the complexity, it’s not always very intuitive!

Fair point, Mock_Up_Militia. We emailed all authors and affiliates based on the details stored in our database, but you’re right - this should have been announced on the dashboard as well. We’ve added a note there today. Thanks for bringing this to our attention!

Good question, the following categories carry the Tools license:
GraphicRiver > Add-ons, VideoHive > Add-ons, GraphicRiver > Fonts, and CodeCanyon > Apps

Hi themeblossom, thanks for reading all the materials first! :slight_smile: Here are the answers to your questions:

  1. If you’ve provided a valid W-8 (which includes either a foreign TIN or US ITIN) and you’re from a country that has a 0% withholding rate, we won’t apply any US RWHT at time of sale.

  2. You don’t have to use the same payment account on Envato Market and Envato Studio, but the new rules will apply to withdrawals from both starting January 1st, 2016, i.e., payment account countries must match the country of residence on the W form, changes to payment account details are limited to one per month, and withdrawals can only be made to a single account per Envato business per month.

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Hi Envato,
So I received another email regarding clarification on the this, but it’s made me more confused. Here’s my case, and surely alot of others too:

  1. I live outside US.
  2. My country has a tax treaty with US, which is fortunately 0%.
  3. I filled the W8 form and provided local tax # applicable in my country used to deduct taxes in our country, and not any separate “Foreign Tax ID Number”.
  4. Does this mean I have to apply for US ITIN? Or my local tax number would work?

Thank you.

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@natman
I provide my details last week, i’ve receive another email but It seems tax form in the author dashboard not working properly again when you select “I will not or am unable to provide a Tax ID Number”

Thanks a lot for the answers. We’re waiting for your official letter now! :smile:

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Actually I think they said that only a third of all sales are from the US.

It clearly states on our statement that a portion of what the buyer pays is a support fee for 6 months, so royalty withholding should not be applied, just like when someone buyers a support extension. Therefore US RWHT should only be applied to the price of the licence.

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@collis thanks for your responses!

I have a few questions:

  • I’ve been to the US and I have a Social Security number and I entered that instead of Tax ID. Does that make any difference in the amount of tax that I pay?
  • Quote from the original blog post by Collis:

Ultimately growing in the key market of the US will lead to a larger revenue pool for authors on Envato Market.

I really want someone from Envato to expand of this. How exactly revenue can potentially go up when Envato is a US company? How will it attract more buyers? Practical examples please!

  • Does that mean even more transactions will show up in the Statement? I’m using the Envato API to create an app for tracking sales and it’s getting increasingly difficult to keep up with changes to the Statement. I wish we could avoid the constant breaking changes to the API, like first adding author fees, then separate transactions for item support, and now tax for US buyers. Some form of versioning for the API would go a long way. If someone is still using SalesRobot they should know what I’m talking about.
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Regarding Foreign Tax id:

I believe this should allow using PAN as Foreign Tax Id for Indians (in India PAN is used for tax purposes and provided by local government)

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@collis this means exactly what ?:
1- It means I will not be able to withdraw to Paypal without being charged in ALL my items sales with the new tax ?
2- it means I will not be able to withdraw anymore to paypal no mather what (like blocked by Envato) ??
3- If that is the case, should I turn my withdraw options to some other option like Payoneer, what should I do ?

Please I need a clarification on this.

THANKS

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@collis Since you’re limiting the multiple withdrawals options, do you take in consideration allowing us to move our themes to different accounts ? For example, i now have 2 themes with 1 partners. I would like to move one theme to their account.

Best regards,
Stefan

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What information about the seller will be on customer invoices from January? Will it still be the company name and address or the author’s real name and address? If it is the real name, can you explain why this is necessary. Thanks

Right, your country not have Tax Treaty with U.S.
You lose 30% of U.S. sales after 1 Jan 2016 .

@collis
WHERE i’m i suppose to get Tax ID number !!!
there is a reason why i work in the web, avoid dealings with numbers and blabling with people.

Maybe Envato should consider to split advertising campaigns to send more non US traffic to non US authors so we can avoid huge drops in sales and minimise author loss.

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