I’m so tired of being here… I will continue to work for them until …
Time to take decision
Need a final conclusion: Envato is Buyer or Author friendly
If Buyer Friendly:
– Use this new announcement(move to US)
If Author Friendly:
– Make this change: if a buyer from US then, Item price = Item price + 30% of item price
If Buyer & Author Friendly:
– Stay in AUS
And, why Russians and other peoples need to pay tax to America!(Currently who pay this 30% tax for US Sales?)
Why we pay the money against us…!
We may assume, it is US Friendly market?
Envato moving to US so they can accept Credit Cards payment from anywhere. The cost for receiving the credit cards payment from Australia wont be affordable to them-
Not IPO, they wont sell it out either this soon.
Now I will print your post and hang it over my bed!
I would write the same and I’m glad that I’m not the only one!
All the best for you!
I am a Non US person so I will be filling the W-8 form.
It is said in the announcement “Withdrawals will only be processed to the nominated account holder
payment details and the country must match the one on the completed W-8
or W-9 form.”
Which country must match? … country of citizenship? or country of residence?
I am asking because I am planning to move abroad next year so can I withdraw the money there?
and do I have to pay the US RWHT totally from my “net earning” or do I split it between Envato and me ?
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.
As of January 1st 2016 we are streamlining our withdrawal system. Withdrawals will only be processed to the nominated account holder payment details and the country must match the one on the completed W-8 or W-9 form.
Can u please do something for new withdrawal system. Becuase i am working with author for partnership . If its happens i will lose many $ from my low income
This is realy important for authors, if you allow this for US author you need to do the sam for other.
First off; thanks much for taking the time to answer our questions!
This is still pretty vague to be honest Since this was presented as the main reason for this drastic measure, I am a bit surprised not be shown some clear and concise data which will indicate that there’s going to be a definite increase in sales.
Perhaps you could answer the following questions relating to this as well?
- 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?
Hi @Collis, I read the articles and i have a few questions.
My country doesn’t have tax treaty, and i understand i should pay 30% for every sale that comes from US buyer (not including envato fee in this 30%). Am i right here?
should i fill any form for this 30% or you just envato will held me that price ?
if i should fill a form should i present this in my tax office in my country, cause i work from home and i don’t have business id. can i do it without business id from my country ?
i have partnership with different autors, i share my envato profit with near 10-15 autors. cause i work html, joomla, drupal, wp, psd. From 2016 should i be able to share my profit from envato or not. if not, the last opportunity will be to share from my paypal. can you explain me this point more, i understand that envato doesn’t have responsibilities about our agreements but just if you can explain me more, will i be able to make more than one withdrawal in different paypal and skrill accounts from envato.
Thank you so much
From what rate 15% is calculated? if an item price is $100 and we will earn $60 as per this page So the 15% should be taken from this price right? If its $80, why I should pay tax for earnings to envato?
Answer for this question is not satisfactory. When our income is $60, why we should pay tax for $80? $80 is not our income. We only get $60? Please re-consider this.
Also, I’ve 7 other questions awaiting answers. Please have a look.
I’ve spent hours reading through all of this, as well these comments.
Some great questions asked and already some good answers given.
Though I am most concerned about:
1.) Collaborative / Partner tools and the restriction of 1 payment per month.
This is a huge hamper to our collaborated efforts and is quite displeasing.
There is a LARGE number of authors that collaborate and I believe this should be strongly re-considered.
So now I have to take 1 payment, then pay out 2, 3, 4 or several others whom have collaborated with us?
2.) What new payment options are being introduced? Forgive me if it’s been said, but I see no clear answer?
3.) What advantages are being given to us, Envato authors, by your decision to move into the US?
How do we benefit? I don’t quite understand this. Right now, I see more draw backs than any benefits?
Please give us a clear concise reasoning for this as it’s most concerning.
In the interests of efficiency, can we split this into two threads? One for complaints and one for questions? Would make it a bit easier to keep up to date on all the questions and answers.
@ThemesDepot Do you also know then that most of those marketplace are non-exclusive and percentage is high? This is all about what we are earning after this tax is applied? You have read all 500 comments but didn’t you get that?
@collis The new withdrawal term could kill Partnership, why don’t keep the current way?
I can’t imagine that how could I pay for my partners and how could they pay for me in future.
I use Paypal and my partners use skrill, I can’t pay them via skrill and they can’t pay me via Paypal.
@ThemesDepot non-exclusive authors are completely died now after this new tax thing applied because envato has the most less percentage for author. Don’t you know this?
Please Envato, we are your authors do some favour for us.
They already said “Authors can find what is best for them” If you find these new changes/policies not good for your business, it is best to move out from here. So, take your decision.
We chatted with our Accountant and he said that we can get TAX benefit for this 15% here in India. So, we are rethinking on whether to stay or move.
We are also keen to know “If they make changes to only single payment per month”. We have lots of partners and this will not be good.
Thanks, Collis for taking the time to attend our questions. It’s much appreciated.
We have partners here on themeforest and the way we paid them uptil now was super easy.
Can you confirm if you are going to rethink on partner payments. Or, there wont be any changes?