Information submitted via the Form W-8 will be stored securely and is subject to our Envato Privacy Policy. You can view the Form 1042-S that gets submitted to the IRS to see which details will be reported to the IRS.
EU VAT is a consumption tax levied on buyers. As the platform facilitating the sales, the EU VAT laws allowed (and required) us to to step in, collect the tax and remit it.
U.S. RWHT is an income tax levied on non U.S. authors when they make sales in the U.S. The IRS regards the source of royalties to be in the U.S. and as such requires withholding tax to be deducted from sales to U.S. buyers. As the platform facilitating the sales, the U.S. requires us to step in, collect the tax and remit it.
The ultimate difference here is that in the EU, the tax was dependent on the location of the buyer, so we effectively increased prices for those buyers (by adding the tax on top). The opposite is true for U.S. RWHT where it’s dependent on the location of the author, and much harder to add on top.
Completing the W-8 form on the Envato Market site, or completing it physically should be the same. In both cases you can add a foreign tax number (i.e. a non-U.S. one) that has been issued by your Government or local tax authority, or write “not provided” and discuss with your tax advisor or accountant.
Great question, it’s something we did evaluate. It’s difficult because the tax is based on the author’s location (rather than the buyer), so they will see irregular pricing. For example, you see one $100 item, click through to check out and it goes up to $130, then you see another $100 item, but this one at checkout is still $100 because the author is in a tax-neutral country. In the case of EU VAT, there’s a tax added, but it’s always the same tax for a specific buyer.
We are always evaluating item prices in general to see where it would make sense to increase/change pricing, and it’s something we’ll be looking at in the new year. However changes would be part of our normal pricing work (where we evaluate the industry, buyer behavior and so on).
“Social Security Number” and “Employment Identification Number” in the W-8 Form are tax ID numbers issued by the U.S. Government. If you don’t have one of these but do have a foreign (non-U.S.) income tax identification number that has been issued by your Government or local tax authority, you should select “Foreign Tax ID Number” and enter your ID in this field (which has no format requirements).
The IRS requires Envato to report income on a calendar year (January 1 through December 31) basis rather than a fiscal year basis. I’m not sure why, but that’s the way their system works! 
We’re starting on January 1st 2016, so that year finishes December 31st 2016, and then three months later in March 2017 we will issue the reports for that prior year.
When you complete a W-8 Form (which is a U.S. federal tax form), you are required to certify that the information you’ve provided is true, correct, and complete, and also acknowledge that there are severe penalties for providing inaccurate or incomplete information.
Good question! We’ve been speaking to a number of payment companies in and out of the U.S. to gather data on improved conversion rates when localized payment options and localized merchant banks are used. There is general agreement that we will see marked improvement, though the numbers vary.
Ultimately though payment providers is our first step into the U.S., and we’re constantly working to grow the buyer markets. A key part of that is starting to get Envato closer to where they are.
It’s important to keep in mind that when an author hasn’t completed a tax form (in your case, as a non U.S. author, we require the Form W-8), we are required to treat the author like a U.S. author who hasn’t provided their details (and hold back 28% of all their sales).
Also keep in mind that if you don’t have a foreign tax number, you can write “Not provided” in the field.
Even in countries without treaties, you may be able to claim a tax credit or deduction, and it’s worth checking with your accountant or tax advisor.
This is a great question. This is an income tax, but it’s an income tax on authors. Envato also pays income tax, and indeed our new Envato US subsidiary will pay income tax in the US of its own (and just to be super clear, we work carefully to ensure we meet our tax obligations).
I think your question boils down to, could we deduct our fee after the tax has been applied? This isn’t easily done in the system, and is maybe better expressed as - can’t Envato reduce it’s fees? Our fees are something we are always evaluating, particularly around non-exclusive rates, and the way we are changing author pricing tools on GraphicRiver. At this time nothing is changing however.
US RWHT is an income tax on author income. A way to think about it that helps me is, the US is saying “when you sell to buyers in our country, we will tax you for earning an income here.”
If your national ID is what you use within your country for tax identification purposes, then it should work for the W-8 Form. However, as we’re not familiar with the specific tax system in your country, we recommend getting in touch with a local tax advisor to confirm.
Here you go, QUAL:
- These requirements apply to both individuals and corporations and both types of authors will need to complete either a Form W-8 or W-9. As explained in previous responses, if you don’t complete either form, we must presume that you are a US author who has not completed a tax form, and therefore apply Backup Withholding of 28% to all of your sales (i.e., not just sales to U.S. buyers). Both U.S. RWHT and Backup Withholding are deducted from your item price sales once they become available to you, before you withdraw, so not withdrawing money wouldn’t change the situation in any way.
- As outlined in the announcement, in most countries, the US tax paid will count as a tax credit or tax deduction in your home country when you complete your tax return. Please speak to your tax advisor to understand how this works in your country.
- If you go to your Statement page and Download the CSV version, open it up and filter to show just Sales, you’ll see the Country listed
Hope this helps!
Hey Miroslav (Collis here, though it’s a joint effort
Although I always say that all authors should contemplate their situation and make a decision that makes sense, obviously we don’t want to lose any authors.
I think I need to check up on this specific question, and come back with an answer. I’ll try to make it quick, but any patience is appreciated.
When you complete the tax form as a company, then you should ensure your bank account details are consistent with the country of residence of the company. Check with your tax advisor to ensure everything is correctly done.
We have no requirement for you to invoice us, however you should comply with your local laws and regulations.
If you don’t have a U.S. T.I.N. or a Foreign Tax Identity Number, please select Foreign Tax Identity Number and type “Not Provided” in the open text field.
Here are the answers to each of your questions, rayoflightt:
- When you complete the form on Envato Market, you will be asked to choose and the form will customize. If you are using a paper form, then the W-8 BEN is for individuals and the W-8 BEN-E is for entities (such as corporations)
- As with form selection, the U.S. taxes that are applied are based on your country of residence
- If you don’t have a U.S. T.I.N. or a Foreign Tax Identity Number, please select Foreign Tax Identity Number and type “Not Provided” in the open text field.
- We will continue to offer Payoneer and Skrill as payment method options for non-US authors. US Authors will no longer be able to withdraw to Skrill.
Hi jamesckemp, as explained above, if you don’t have a U.S. T.I.N. or a Foreign Tax Identity Number, please select Foreign Tax Identity Number and type “Not Provided” in the open text field. If you have a tax identification number that has been issued by your Government or local tax authority, you can provide this.