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

[collis]

Please I want also to ask a question to ENVATO:

Currently I don’t have an ITIN Number, and I want to apply for an it from the IRS.

To apply, Some documents are required, which are:

1.Certified copy of my Passport
2. Form W-7 (availabe on the IRS website)
3. A signed letter or document from the withholding agent (in this case it’s ENVATO), on official letterhead, showing my name and verifing that an ITIN is required to make distributions to me during the current tax year that are subject to IRS information, with a postmarked envelope addressed from the withholding agent.

Please, Are you (ENVATO) able to provide this letter for me (required document number: 3) in order to be able to complete my application documents?

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

I still have confusion for TAX apply on item price.

As per article mention on below URL http://inside.envato.com/usa-tax-withdrawal-changes/

Information under

++++++++++++++++++
When will Envato not apply US RWHT?
US RWHT won’t be applied on service income including Item Support extension purchases and freelance/service work you provide via Envato Studio. The portion of item support which is embedded in the Item Price will have US RWHT applied.
++++++++++++++++++

Our statement page clearly bifurcate 6 months included support price.So tax apply only on bifurcated item price not with 6 months included support price.

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.

I see that yet again, my questions remain unanswered. Posting these for the third time now… If you’re not willing to discuss the motives for this drastic move, please be up front about it and let me know (so I can stop wasting my time repeating myself).

• Which additional payment options/gateways are you planning to implement?

• Why do these additional payment options require a physical presence in the US?

• What exactly indicates that having these payment options/gateways will in fact lead to an increase in sales?

• How is “being closer to buyers” going to boast sales?

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

Hi. I’m non-US author. My country allows me to claim a 0% rate of withholding (Yes, I’m lucky :-)). In the W8 form I can put U.S. Social Security Number. Can I still claim a 0%? I’m a bit confused after reading this natman’s post. It says I can put either Foreifner TIN or ITIN (and nothing about SSN). Please clarify.

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.

What if after sometime we want to change this person (account owner). I assume that we need to fill out a W8 form again under the name of new individual. Is that right?

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

Hi @natman @collis Paypal Question:

I’m not an US resident, but I do have an US paypal account, because at the time I started selling items at Envato paypal where unavailable on my country, so my brother (who lives in the US) open a US paypal account for me, with my name, etc. So I currently withdraw my earnings from AJ to my US paypal account and normally I spend my earnings paying for online services with paypal ( I don’t do withdraws to physical bank or ATMs)

So if I now fill the IRS form for non-US authors I still be able to withdraw AJ earnings to an US paypal account ? Or in other words…will Envato block withdraw earnings from non-US accounts to US paypal accounts ?

Thanks

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

In Germany we have 2 TAX numbers (IdNr. and Steuernummer). I’ve used the IdNr. for the W8. Hope that was the right one. Anybody from Germany who can verify this?

Another thing: I’ve already sent the W7 and W8 to the IRS last year and both got rejected because of negligible reasons. The form Envato offers is an simplified form of the W8 and doesn’t even require a copy of my ID. Can you (Envato) assure me that, after I have completed your W8 Envato form correctly, no taxes will be withhold by the IRS?

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.

I read through all 1000 posts, but still don’t understand, can we use Tax Id from country where we live (for example in Russia we have INN as identificator for tax payers) Can we use it in field “Foreign Tax Id”?

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.

What if I don’t provide ANY information? Will I be able to withdraw the money I earned during 2014&2015 in 2016 or will it be held hostage until I provide all my personal information?

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.

@collis @natman When we fill out w8 form, is there any type of confirmation that everything is ok and that is accepted?

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.

Hi, I have a quite a few partners that sell CMS version of my templates. Starting 2016, I won’t be able to get my share from then any longer through envato withdrawals, since you are limiting this to only the account holder. This will create a lot of problems and additional fees, because they will have to send it first to them (paypal, bank account, payoneer) and then somehow to me. Can you guys implement some workaround/solution to this issue? Maybe that my share can go directly to my envato account? Otherwise, this means losing even more hard earned money (apart from the additional US tax in some cases) and longer waiting times.

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.

1. As per US rules, tax should be deducted at the time of trade. That means, Are we able to see the US sales & corresponding Tax deduct in My Statements Page?

2.The US tax is applicable for US sales, so we should pay tax in our country for other global sales right? If so, at the end of each year, will you give us form splitting US sales anf Global sales?

3.The post says “If you withdraw to PayPal, we will ask PayPal to exclude your sales from PayPal’s 1099-K reporting.” Will you ask the same for Payoneer also?

4. Also, any chance to a) Increase the item price (15%) to cover the loss? b) increasing author commissions up to 85% and starts from 70% instead of 50%?

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 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.

Also, @natman , don’t you think that you need to add a 5th section to allow users to add ITIN (İF THEY HAVE ; because ITIN and Foreıgn Tax ID Number are not the same thing)

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

In addition to filling out the form “Tax information” I must also fill in the W-8?

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.

So, when I fill that form with the ID (which is also a tax number and we use it for any kind of work, tax, social security etc. etc. , it should work) given by my government to me (as an individual), would you be able to let me know that “HiBedros, the number you’ve given is allright, IRS accepted it and you’re benefiting from the treaty between your country and USA” ? Or else, “Bedros the number you’ve sent didn’T work and instead you must apply for an ITIN”…

And one final one ; I think things are getting complicated when they’re not supposed to… If the issue is to prove that we are living in a country that USA has a tax treaty, so why all of this confusion? I am living in that country, I have the ID given by that country, and withdrawing from the same country, SO WHAT’S THE PROBLEM, right?

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!

Just a note to Envato - This Notice of TAX CHANGES should be a MAJOR ALERT to all authors IN OUR DASHBOARD!

We only discovered this serious news after stumbling across the Halloween Pumpkin Contest Notice…which after reading all the dissent in that post (as to how there were bigger issues for Authors to worry about right now than colouring-in pumpkins) - led us here… to this far more important issue affecting the entire community.

I don’t think everyone is actually aware of these impending Tax changes as not everyone reads the forums.

Just saying!

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!

"When will Envato not apply US RWHT?

US RWHT won’t be applied on items sold with a Tools license (such as items in GraphicRiver’s Add-ons category). Income made from selling this kind of license is classified in a different way and doesn’t give rise to this tax."

Is the GR add-ons category the only one free of new taxes or are there any other categories that will remain the same? Please specify.

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

@natman @collis Hi guys, I have several questions of my own. I read everything in this thread and didn’t find answers so far:

if our country is on 0% list, do you still deduct those 30% and then we get those US IRS fees through the tax refund request sent to our tax authorities at the end of fiscal year? Or you simply go with 0% in the moment of sale?

you said that only one financial account is possible per account on Envato market. Does it mean that the same account will be used both for our earnings on Theme Forest and Envato Studio? Or we can split this in this case?

Thanks!

Hi themeblossom, thanks for reading all the materials first! 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.