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

I don’t understand is we still have no official response

a winner for @Collis

@collis Yes Collis, Could you please make this clear? I don’t think it’s fair if we have to pay tax on author fee part.


I agreed. Can anyone from Envato confirm this? and if so, can Envato provide any explanation?


This is just my opinion :

I am happy to pay tax in my own country but why should I pay tax to a country from which I have nothing to do !

This is an online business, right ? Why U.S. and not an offshore country, like Cayman Islands, Saint Vincent, Belize, Seychelles, Marshall Islands, Switzerland, Luxembourg and others . This is perfectly legal. And large companies like Google, Facebook and others use it . ( ) .

"Anyone may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes."
Gregory v. Helvering - Supreme Court of the United States

You want to have business in America like to put billboards on the streets? Or to have employees in America? Why not make a company operating only in these areas ? is an online platform that can operate anywhere in the world ?

Envato, you can make a beautiful life to everyone authors and customers.
I hope you make the best decision for everyone.

Have a nice day,
Keep everything much easier.


Hi all, before I jump into answers …

A number of authors have asked about partnerships for non-US authors. I’d written in the original announcement that we have looked into what it would take to have features to allow partnerships and it was a complex administrative burden.

Enough authors have asked and been concerned, that we’re looking into it again urgently. I was hoping to find a few authors with partnerships who’d be comfortable having a quick phone call with me so I can understand better the requirements and concerns with putting one partner forward.

If you have a registered partnership - in other words you’ve registered a business that is a partnership - and wouldn’t mind chatting, can you email me (collis at envato) to set up some time on Skype? It would be enormously helpful.

Note that at minimum there are extra forms for the partnership and each partner, and the tax rate applied will be the highest of all the partners, and there’s a few other requirements we’re already aware of that might mean withdrawals of this kind only get processed less frequently. We’re trying to look into the others and see how feasible it would be to make a manual workaround somehow.

OK … answers!

Thanks LC, for non-US authors you’ll receive funds in the same way as you currently do.

The W-8 Form has two main purposes: 1) it let’s us know your country of residence so we can figure out what treaty rate to apply (if applicable) and 2) it confirms that you’re not a U.S. resident. If you’re a non-US author and you don’t complete a W-8 Form, we must presume you are a US resident who has not completed a W-9 Form and withhold 28% tax on all sales regardless of license type.

If you’re a non-U.S. author who only sells items with a Tools License and you complete a valid W-8 Form, no U.S. RWHT will be applied.

Hi surjithctly, here are the answers to your questions:

  1. We are opening up in the US to grow the community and revenue overall. I think you’re asking at what point does it become an overall win. The answer is not simple because there is so much variance between authors. For an author in country with no tax treaty, who has the worst tax rate, who gets no tax credits, who is selling only royalty items (no tools license, no item support, no studio services, etc), then we estimate about one third of sales will have US RWHT applied which is about 30% x ⅓ of sales = 10% of sales paid in tax. So we would need to expand revenue overall by about 11% for such an author to be comfortable or be better off overall.

For many authors, a much smaller increase will be an overall improvement. For authors in countries with a 0% rate, or tax credits, then any increase should improve the overall revenue. Note that for simplicity, I’m not accounting for any changes in administrative process (i.e. completing a form, etc).

  1. & 3) Unfortunately, these are the US rules and we don’t really have any choice in their application.

  2. Envato Market remains a platform that connects buyers to sellers (authors). We’ve recently introduced author-driven pricing for some GraphicRiver categories and will continue to look for opportunities like this that give authors more control. Unfortunately, however, we’ve ruled out location-based selling for now due to the technical complexities involved.

The rules that make a payment a royalty payment (and therefore subject to US Royalty Withholding Tax) are quite complicated. So for example, purchasing a tool such as a Photoshop add-on doesn’t create a royalty payment because of how the software regulations work in the US tax code. I’m not familiar with the Appstore, but would guess that apps would also fall within the software regulations. (Keep in mind I’m neither a lawyer nor a tax advisor, and if you really want to investigate this subject you should talk to one of those)

We have exhaustively (and expensively) researched how to classify the things sold on Envato Market in an effort to ensure we didn’t apply taxes any more than absolutely necessary.

The other reason we require a W-8 form is to identify an author as a non-US author. I’m not sure how Apple has set up their Appstore, and they may have different requirements in this regard too.

You’ll need to speak to a tax advisor for answers on this specific question and case. In most countries that I am aware of, taxes are paid on business profit (i.e. revenue minus expenses = profit). However the rules in different countries and for businesses and non-businesses are very variable so you really need to speak to someone about your particular case who is qualified to give advice.

Hi Osama, this was actually a mistake on our end so thanks for bringing it to our attention! We’ve updated the list of countries for citizenship and you should now be able to select Syria from the dropdown menu, so long as you are resident in a country that is not on the list of sanctioned countries (like Saudi).

Sorry for any confusion caused, and thanks for raising it!

Hi themesuite, with the W-8 Form you have the option to complete it as an individual or a corporation.

Your situation sounds a little different to Dream-Theme’s due to the type of entity involved - yours being an Incorporated Company and theirs being a Limited Liability Partnership. Corporations are commonplace on Envato Market and this latest set of changes shouldn’t prohibit them from continuing to sell with us in any way.

We’re also looking more into partnerships, so if you have in fact got a partnership, please contact me (collis at envato).

I’ll do my best! :slight_smile:

So, using your example, I’m going to look at the sale of a $45 WordPress theme to a U.S. buyer.

The first thing is that in a $45 WP theme sale, $9 (20%) of that is our Envato Buyer Fee directly to the buyer. So the author’s Item Price is in fact just the $36.

Step 1: $45 - $9 = $36 is the author’s Item Price

Next, we apply US Royalty Withholding Tax (RWHT) and send this to the IRS. This changes based on the treaty rate between your country and the USA. Again, using your example, let’s say the author’s country doesn’t have a treaty with the US and the RWHT rate is 30%.

Step 2 (part 1): 30% of $36 = $10.80 to the IRS

The other thing that happens (at virtually the same time as the RWHT is applied) is that we take our Author Fee. This will be based on the kind of author you are (exclusive or non-exclusive) and the amount you have sold on Envato Market. You can see these rates here.

Let’s say for the purposes of this example that the author is an exclusive Elite author with an Author Fee of 12.5%.

Step 2 (part 2): 12.5% of $36 = $4.50 to Envato

These amounts are deducted in sequence from the author’s earnings of $36:

$36 - $10.80 (to the IRS) = $25.20
$25.20 - $4.50 (author fee to Envato) = $20.70

Therefore the author will have a net earning of $20.70.


Hi everyone, please also check out the important clarification we’ve just made in a separate pinned post re. completing the W-8 Form if you don’t have a US TIN or a foreign tax identity number.


It appears you’re missed my questions; let’s try again :slight_smile: Would you mind answering the following:

  1. Which additional payment options/gateways are you planning to implement?
  2. Why do these additional payment options require a physical presence in the US?
  3. What exactly indicates that having these payment options/gateways will in fact lead to an increase in sales?
  4. How is “being closer to buyers” going to boast sales?

Important question: is the W8 form gonna get in the hands of Envato and Envato only? Or is it going to be sent to the IRS and / or other government agency?

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I hope that the team Envato ready for dialogue with disgruntled customers. When buyers see that many items were left without the support they will seek dialogue. And the goods can be left without support, because the new rules of taxation will work. If the product does a group of authors from different countries, the possible collapse of these groups.

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@collis @natman You should create a new thread for partnership and withdrawal change discussion. Was an important announcement and shoulda been treated as a separate one.

This thread is too much focussed on Tax and people’s frustration that partnership issue got buried.

Good questions. I’d love to see the answers.

I think the only reason, is the buyers will tend to buy from a US company rather than Australian company, because of the legal protection. If they buy something from US comapny, they may feel secure if something happened later.

I’m not sure, looking forward for the official reply.

What Information is Sent to My Tax Authority?

Outside of the US, Envato generally doesn’t send information to local authorities. In some circumstances, we may be required by authorities to provide information. You will need to provide your tax authority with the summary document (see above) to claim a tax credit.

Note that the IRS has formal information exchanges governed by their various double tax treaties, and may report your US sales for other purposes.

###Repeating some important questions missed.

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?

(Make it happen, now its only 6 lines per sale, lets make it 10 within 2016. pun intended)

**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%?


@collis you still have not answered most important question:

I am not US resident and I fill W8 form, and I have foreign ID number set to ‘not provided’ and my country has no US tax treaty. Do you still take 30% of all my sales to US buyers? If that is the case, why it is done and is there a way to get that money back?

And, in your calculation example, why do you apply tax to the earnings before Envato fee, this is not what we actually earn, and the tax should be applied after you take your fee.

Finally, I work with other websites that also required W8N forms, and I was never withheld any payments from US buyers earnings, and it was never the issue. Also, all this would not be the issue if Envato was to work as it should be: as direct seller and in that case it would solve all problems for all authors. For the high fee you take from our earnings (and 30-50% is very, very high), it is the only logical way to do business with market like this one.


I am not US resident and I fill W8 form, and I have foreign ID number set to ‘not provided’ and my country has no US tax treaty. Do you still take 30% of all my sales to US buyers? If that is the case, why it is done and is there a way to get that money back?

According to the latest thread… in that case, you’ll get a 30% withholding on all US sales, but no withholding on non-US sales. As for getting it back… you should speak to a tax professional in your country.

Yeah, I did that already. I talked two 2 officials in the tax revenue offices and they have never had the case of something like that, and they have no idea that it is possible to do that: getting money back from US IRS. There are no forms available for something like that and they are not going to do it that is for sure.


Getting the “US tax” back I think will be a bureaucracy nightmare. I my case also the financial advisor has no ideas how that can be done for the moment.


Looks like that 30% is gone then, unless there’s some fancy process that you or they haven’t heard of, for getting it back.

One thing I don’t understand is:

When Envato were located in Australia, we as authors, sold assets to people in the US, but we didn’t have to fill out these forms. So why can’t the author side of Envato be kept in Australia? What I’m asking is, is it possible to split Envato into two companies: Envato Australia and Envato USA?

By doing that we as authors can still sell to the USA from Australia, like we’ve always done, without having to fill out these forms and paying taxes for Envato. Collis I would like to hear what you think about that, is that a possibility and if not, why?

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