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

:cry: :sob:

Yeah! And red elephants are flying by outside of my window! :smile:

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It will make no difference, the US RWHT has nothing to do with the decision of Envato to expand to the US!

The general IRS rule is:
“A person that makes a payment of U.S. source income to a foreign person must withhold the proper amount of tax, report the payment on Form 1042-S and file a Form 1042 by March 15 of the year following the payment(s)”

The person making the payment is considered to be the withholding agent, in this case Envato. You in Bolivia are the foreign person from the perspective of the US IRS, no matter if your work for Envato AUS, Envato U.S. or Envato (whatever).

The only way to avoid this tax is not making sales in the US. There is no option here to disable an item for sales into a specific country. Perhaps you find a different online marketplace who don’t make sales with US customers. I doubt there is no one, all the big players in this market segment can’t ignore the US market and follow the IRS rules.

Yes, but until now we didn’t have to pay those U.S. taxes!

Until now the payments were not “U.S, source income” because Envato had no connection to the U.S.A. and was a real and only Australian company as far as I know (Envato Pty Ltd).

So you could say it was maybe “Australian source income” and the IRS could not get taxes from that kind of income. As far as I know the IRS can only get their taxes if the income was generated in a U.S. company.

If the Company “XY” is an Australian company (like until now), the IRS has no influence, but if Envato converts to an U.S. company the income will change from “Australian source income” to “U.S, source income” and we have our big tax problem


I just wanted to know why Envato does not let everything like it was before (or is until now) and open a brand new company in the U.S.A. Here an example, Nestle has different companies/businesses with different managements, different headquarters and so on
:

        Nestlé Research Center
        Nestlé Nespresso
        Nestlé Professional
        Nestlé Purina Petcare
        Nestlé Waters
        Nestlé Health Science
        Nestlé Nutrition Institute
        Nestlé Institute of Health Sciences
        Nestlé Skin Health

So Envato could create the following:

        Envato Australia
        Envato U.S.A.

Two independent companies.

I’m not a tax advisor, so that’s just the way I understand it
 :smile:

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I saw many announcements for changing background color from GREY to WHITE! It took months to that change be applied!

Now I see (by accident) such terrible “improvement” which may deeply impact my business and it will be applied in next 2 months while I still don’t know what it really means!

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The only one who thinks there is any “community” here is Envato.

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No, like I said before, it doesn’t matter where Envato is registered for their business or where their headquarter is located. You are the seller here on this platform (a circumstance changed by Envato earlier this year) and when you sell a digital item to an US customer you generate US source income and be liable to pay the tax for this income. To make it easier for the US IRS not to deal with every single seller in person, they put Envato in the role of the withholding agency for this tax and require them to collect the W-8 form from their sellers.

Envato ignored this US tax until now, as they have ignored the EU VAT for many years, but now and in the near future they follow the international business- and tax rules.

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OK, now I understand! Thanks a lot for clarifying that!
Then the problem has nothing to do with expanding to U.S.A.

Envato used the following title:

“We’re Expanding to America. Important Tax and Withdrawal Changes for All Authors and Affiliates”

That sounds as the expansion has a direct connection to the tax changes. I bet that a lot of the authors understood it this way! That caused a lot of confusion, at least for me :smile:

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I’m sure nobody would mind paying these extra taxes, if Envato would increase commission rate to 70%.

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or at least make 50% also for non exclusive authors.

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This is what Envato could have done too - for ThemeForest and CodeCanyon at least - but it would probably increase their tax burden.

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Well it doesn’t matter who the seller is
 Envato set the price. There’s no collusion, or dodgy dealings, or clandestine reasons why they set the prices at what they set the prices at. It’s definitely not price fixing.

You’re confusing income tax with sales tax (VAT). This is directly connected with Envato becoming a US business.

When your business is in Australia there’s no way you would be liable for income tax in the US because income is generated on the Australian soil. But when you move your business to the US then income is considered to be generated in the US soil althouh everything happens on the internet.

As far as I know, some US states have sales tax as well. It’s probably in the pipeline too. But right now this is about income tax which is only paid by the residents and business owners in a country.

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For the last year Envato have been claiming that authors are the sellers. If that was the case we would have to pay income tax to Australia too, but we didn’t. Am I the only one who finds this interesting?

I’m guessing Australian law doesn’t allow Envato to put this burden on us no matter what they claim and that’s why they are moving to the US. Conspiracy conspiracy


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Some side notes about US tax situation. I think i need to share it here.
First of all, this is my first time when my confidence in Envato shook. All previous changes worked well for me, as well as strong support from company via featured author, featured track and so on. Thank you for this happy things in past, Envato. And newer changes also not bad too, because my country is signed agreement with US about taxes. But what changed in my view on Envato due all latest announcements? Confidence. We are playing in very competitive and dangerous game. I mean all we, who working full time on stock market. Especially when Audiojungle is main source of income for some of us. Every changes of rules of this game is very very dangerous. I tried to think about non exlusive authors and authors from countries, which did not signed tax agreement with US and now facing perspective of loosing their portion of income. How do they feel? This was expressed in all posts above. Frustrated, abandoned, angry. Why? Because RULES CHANGED. We adjusted our business models to previous versions of this rules, and someone decided to change it just in 2 month. We spent YEARS learning how to work here, and my humble suggestion to Envato is to stop experimenting too frequently and to begin seriously think about those, who feed them - i mean Envato authors.
In current situation in my opinion fair decision is to allow us to choose, how US tax will be implemented. If we are sellers, we need options to NOT sale items in US, or to ADD tax rate above our price, or FROM our price. To be honest, Envato idea of sales platform, where Envato is platform for sales and we are sellers, is not fair. We ARE NOT sellers. We are not setting prices, we are not blocking countries, where we do not want to sell our items (as on Ebay), you can continue this list. All this done only with aim to minimize Envato taxes. I am afraid, this is only beginning of some serious legal issues with this model. We are severely limited as sellers here to the point, where we MUST NOT concidered sellers anymore. This is big big problem now. So i ask Envato to be fair and honest with us and allow us to choose all this things - prices, regions where we are working or not, etc, etc. The English is not my native language, sorry for all errors, but i believe it was at least understandable.
What i decided now - i am not as confident in Envato anymore as i was few weeks ago. Pink glasses is broken now. I decided to produce more non exlusive tracks for other markets, with aim to protect my sales and my future (i did it already actually, but now this is my number one task in my to do list). Just imagine how serious is danger of loosing your job now - if US decided to ban completely my country, this will ruin my income due all latest changes (Envato not working anymore with countries under full sanctions, glad we are not there). This is bad. So i am not in panic. But not happy either. Envato was my biggest revelation during last few years, but now its time to grow. I hope @collis will take some attention to all those negative voices. They are not just moaners.

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Good points @LumenMedia ! And we are clearly not the seller. At least not according to federal tax office in my country :wink:
This won’t cause me too much trouble, but I must say I am not happy when doing business with Envato Ltd seems more and more shady for each change they make on this marketplace.

That’s one of the reasons I don’t ever want my real name and personal info stated on those invoices Envato makes. And if there is no way to avoid that I will move my entire portfolio to another marketplace.
Makes my sad, because I really like it here actually


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Yeahhh :slight_smile:
It will be very good

And 65%-70% for Exclusive Authors.

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For me its a 30% tax for US costumers because my country dose not have a treaty with USA
 But makes me wonder, why we don’t pay taxes for every country our costumers came from. Sooner or later some other government will ask for they piece of cake from authors(or buyers) and this will probably open a door. I am just so glad that after VAT changes I started to focus on freelance jobs


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Sorry for posting this in US thread, because you mentioned it here.

As you said, you are deducting envato fees after the tax taken right? But for Non-US Authors, they already took by US Govt. Then what we do with the invoice for Envato Fees? How we will get the refund from our country?

I think you should reconsider this for Non-US Authors, or please let us know how we can refund the fees from IRS? will you provide such forms?

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