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

I sat and thought. It is possible to deduct that tax from my country income tax or refund by U.S. gov ?

What do I get if I pay taxes in a country that I have no connections? Do not use their infrastructure or public services, no insurance benefits in that country … What are my benefits for this taxes ?

Thank you .

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@collis, My stupid, I really don’t understand why does US Tax effect to an Australian based company, why all your authors have to pay tax to US if they don’t complete the Form W-8?

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A question.

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

Thank you!!! :slight_smile:

You’ll get an official document at the end of the year showing how much tax you’ve had withheld. There’s a screenshot of one somewhere in this thread. That’s proof that they’re paying the IRS your withheld amounts.

But you’ve got to think to yourself… if Envato were going to take this 30% and just spend it on hotdogs, designer suits and speedboats, and not give the IRS a penny, they’d be out of business in a flash.

The tax information is the W8 as far as I know.

I’d be surprised if they do update it. One reason being that there’s so many variables depending on where the author lives, so it would get a bit complicated. Another is that this is an income tax, which is subtracted after the existing calculator has done it’s thing. The new process doesn’t affect how much you earn, so the earnings calculator is correct, it just affects how much you are taxed.

And probably the most important reason… if you want to be a non-exclusive author then using the calculator if you’re on 30% withholding isn’t going to result in a number that makes you want to sign up!

Hi friend ; “merci beaucoup” for all this information.
I really, really appreciate you taking your very precious time to enlighten all those aspects, you’re a hero :blush:

I also have a question to @natman …:
I have an ID number given to me by my government, and we use that also as a Tax ID.
I will use that number and fill the form that you gave us to use on our…:

profile > settings > tax information

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?

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read here:
https://www.irs.gov/Businesses/U.S.-Tax-Withholding-on-Payments-to-Foreign-Persons

Envato is relatively late to implement this scheme, other online marketplaces like [NAMES REMOVED] have been doing this for years. It also does not matter whether Envato is located in Australia or not, through this platform authors (foreign persons) generate sales in the USA and therefore the income of these sales falls under the withholding tax of source income in the US.

The only choice to evade this, is not doing sales in the USA by foreign persons.

I have the same question as Bedros, how can we be sure, that our country Tax Id will be accepted by IRS and we won’t get unpleasant surprise at 1th january???

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You’re welcome dude. I’m just a guy who doesn’t like to be screwed by tax collectors :laughing:

On your final thought : they may be overcomplicating things as the W8 is here to certify that we’re from this or this country, and therefore the applicable tax treaty and retention rate. This should be enough (and it’s enough for some big companies, like Apple - I did filled two W8 for them, no tax id, no pb). BUT one must also consider that they have to protect themselves and us (yes us, if they do something wrong, WE pay the taxes) in a highly protective legal environment (US). If Amazon requires ITIN/EIN from their authors, I can understand that Envato does the same (debate on why they move to the US set apart).

In a few months, everything will be business as usual. With dead authors (RIP, collateral damage…), some surviving (hang on!), and some skyrocketing.

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@MarHen65 you’re right . This was implemented by [NAME REMOVED] an year ago .
I hope this Envato move to generate more sales … all things for the better. :smile:

Thanks again ; will be waiting for the response of Envato on this one. Wish you the best weekend ever, let’s see what will be their response on this.

Still paying tax of a country we don’t reside in is not beneficial for business. We are not even getting compensated for our loss.

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It says that it will apply to sales made after Jan. 1st.
What about my current Envato Wallet?
I’ve read that if I don’t complete the W8 I won’t be able to request further withdrawals. So all the money in my envato wallet will fly, right? I can’t find any info on that…

This post explained very clearly about W8:
http://blogs.angloinfo.com/us-tax/2012/12/24/what-is-form-w-8ben-and-what-is-it-used-for/
My conclusions after reading dozens of pages about this tax : not refund money or deductible in your country .

“Apple solution” for Envato :smile:

Since the App Store contracts are characterized as a “sales/commission” agreement, as opposed to a “royalty” agreement, there is no tax withholding for sales in the USA App Store. In addition, payments from the USA App Store will not be reported to the IRS on form 1042 at year end.

@AuthorMusic read above, this question have above an official answer . This decision does not affect your wallet. It is only applicable after Jan. 1st.

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By new set of rules, if you are non-exclusive author, at the end of the month you will owe Envato some money.

If you’re in a country that doesn’t have a tax treaty, absolutely! The 30% actually works out to a 66% deduction in net earnings. Not good!

(post withdrawn by author, will be automatically deleted in 24 hours unless flagged)

@natman

Can we get an answer to this please?

I am in the same situation. Confused about “Foreign Tax ID number” in India. Maybe an Indian author can tell us.