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

I think I just got lost in the whole discussion :confused:
Could somebody please tell me, earnings from December, which we are going to get at 15th of January,
are they going to be taxed by the new rules (IRS ones) so 30% from US buyers or this whole thing will start with
sales in January (payment in February)?
Thank you! :slight_smile:

No, the withholding will only be on items sold from the 1st of January onwards, so none of your earnings from December (which you get paid in January) will have any tax withheld.

Thank you so much SpaceStock!
Got it now! :slight_smile: :slight_smile:

For example, let’s say the Item price = 10$

Let’s say you’re an exclusive author, and your rate is 50% and the tax rate is 30% so 50% of 10 = 5 and 30% of 5 = 1.5, So 5 - 1.5 = 3.5$

You get: 3.5$ !

So what about non-exclusive authors ? i think they are selling their items for free. :joy:

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The 30% (or whatever the applicable rate is), is subtracted from the item price, not from your 50%. The item price is 80% of the list price, unless you’re on GraphicRiver.

So for a $10 item, you’ll get $2.60

A non-exclusive author would get $1.20

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That’s a bit inaccurate I’m afraid, the withhold percent is taken from the item price not from the list price (see what the list price and the item price are here).

Let’s say the list price of an item is $10 and it’s not a Graphicriver item, the author is selling the item exclusively and has sold less than $3,750, and his country doesn’t have tax treaty benefits with the US, his net earnings will be like:

  1. Subtract the buyer fee which is 20% from the list price: 10 - (10 * 20%) = 8 that leaves us with the item price

  2. Subtract the withhold percent from the item price: 8 - (8 * 30%) = 5.6 that’s the author fee and the net earnings

  3. Calculate the author fee % from the item price, then subtract it from the amount you get at step #2:
    5.6 - (8 * 37.5%) = 2.6, that’s your net earnings (I’m sorry)

For Graphicriver items, it’s the same but instead of taking 20% from the list price as a buyer fee, take the fixed amount of the category where your item is located at (you can find a list for the buyer fee of each category inside the link above)

If you find it complicated to calculate your net earnings, take a look here.

EDIT: Space has beaten me to it as always. :joy:

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Thank you, but i have a small question if you don’t mind, i don’t a have any TAX ID, or ITIN, what i have to do ?

You need to get one or the other, or you’ll be paying 30% rather than 10%. Speak to your local tax office, they should be able to give you a tax ID.

Keep in mind that if you don’t fill out the W8, then you’ll get 28% taken on all sales. If you fill out the form (with or without a tax ID), then you’ll only get taxed on US sales.

So you mean even if i fill my tax id, they will take taxes from US ? and how much will be the percent of the withhold if i provide my tax id?

Thank you,

No. If you don’t fill in the W8, you’ll get 28% taken from all sales. If you do fill in the W8, but without a tax ID, then you’ll get 30% taken from all US sales and 0% from non-US sales. If you fill in the W8 with a tax ID then you’ll get 10%* taken just from US sales and 0% taken from non-US sales.

*I’m pretty sure it said 10% for Turkey in the list.

Well, Thank you very much, now i got everything. :blush:

Many Thanks.

Hi, what happens if we send the tax-forms after the deadline? Couldnt find info on this anywhere…Thanks

I’m just guessing here, but I assume you’ll get taxed 28% on all sales until you do fill it out.

Overall we are left with 10% per sale and double taxes, and plus taxes for Balkan countries, there is no way out, slavery everywhere, bureaucracy wins. Why Envato takes 50% to 70% from start we cannot find a reason and justify that, that’s ridiculous, and on top of everything now all of this.

3 Likes

Envato take 30 to 64% depending on your sales and exclusivity, not 50 to 70%. Although I appreciate it’s far from an insignificant amount, it’s also no more than most stock marketplaces, and I think we get a pretty good deal for what we pay. The main thing being a steady stream of traffic looking to buy assets. I’m sure I’d sell nowhere near as many items if I just soled them through my website.

And just on the 10% part… the minimum you’d be left with as an exclusive author, no matter what you fill in or don’t fill in, is 26%, not 10%

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Ok, thanks. That sounds logical. Can anybody confirm this?

Couldn’t find an official answer to your question.
If the reason behind not completing the W-8 Form before January 1st is the Tax ID Number or ITIN, I suggest you fill the W-8 Form but at “Tax ID Number” choose “I will not or am unable to provide a Tax ID Number”, by doing so, when the first of January comes, 30% will be taken from your US sales only which is absolutely better than taking 28% from all your sales if you don’t fill the W-8 Form at all.

2 Likes

Great, thanks!

Ah, I forget to mention that you can update the submitted form later when you get the ITIN or the Tax ID Number.

Did any of the UK peeps figure out if we should be using our ‘National Insurance’ number, or our ‘Unique Taxpayer Reference’ (UTR) number you get on your self assessment thing?