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

[OsamaSayegh]

If you don’t fill the W-8 form they will withhold 28% of all your sales.
If you fill the W-8 form but you choose not to submit a Tax ID Number, they will withhold 30% of US sales only, no matter where you live.
So if your country doesn’t have tax treaty with the US, it doesn’t matter, just fill the W-8 form and choose not to provide tax id number.

@natman

You have until January 1st, 2016 to fill out the form, however, we encourage all authors to complete their form as soon as possible to make they’re ready well ahead of the deadline and avoid any unnecessary withholding. Starting early is particularly important if you don’t have a Foreign Tax ID and need to apply for an ITIN - the IRS estimates the application process can take between 4 and 6 weeks. If you are concerned you may miss the deadline, you should complete a W-8 form with whatever information you have, and then resubmit a fresh one when you have an ITIN (to prevent the US presumption rule kicking in and Backup Withholding applying).

After January 1st, authors who have not completed a W-8 form will be presumed to be a US author who has not completed a form, and we will apply Backup Withholding tax of 28% on all sales. We will remit this tax to the IRS frequently, and once it’s gone, you will need to take it up with the IRS, and we won’t be able to assist much.

[MNKY]

1. I want to fill W-8 form as a corporation. Can I use my personal Tax ID number, if I am the owner of the company? Or do I have to apply for Tax ID as a corporation?
2. Does bank account have to match Country of Incorporation or Permanent Residence Address?

[Codevz]

@OriginalEXE @OsamaSayegh Thanks, now its more clear for me

[codespacing]

After some researches, the diffrent ways to apply for an EIN are mentioned on this page https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-to-Apply-for-an-EIN

I think the possible way for us (Foreign Persons) to apply for this nonsense is either by fax or phone call. The online solution is restricted only for U.S. persons having a valid Taxpayer Identification Number (SSN, ITIN, EIN). damn, i don’t even know what i’m gonna tell them on phone.

Envato, why don’t you just stay in Australia?

[Delightthemes]

Read this blog. Tell them you sell ebooks.

Non-US Self-Publisher? Tax Issues Don’t Need to be Taxing (Overhauled Oct ’14)

@codespacing By the way dont you have your own Morocco Tax ID Number??

[XeePress]

Possibly I would establish a LLC about after one or two years.
Is it possible to fix or resubmit my W-8 settings to Envato whenever it changes?

[codespacing]

Thank you @drsankarl for the useful link. No i don’t have my own Tax ID number just because we (freelancers) don’t pay taxes in Morocco.

[foreverpinetree]

@codespacing Finally I decide to try Fax since 4 days is acceptable, I didn’t find other better solution(By phone is fastest but my spoken English is bad )

[Mega-Music]

Here too…Taxes comes arround 40% in my country for a freelancers…No thanks

[natman]

Hi everyone, here is today’s Q&A. Please remember we are only answering new questions, i.e., questions that haven’t already been addressed in our blog post, help center articles or previous forum Q&As (you can find links to all previous posts by me and Collis in my first post). Thanks!

@okstudios

Hi Envato,So I received another email regarding clarification on the this, but it’s made me more confused. Here’s my case, and surely alot of others too:

1. I live outside US.
2. My country has a tax treaty with US, which is fortunately 0%.
3. I filled the W8 form and provided local tax # applicable in my country used to deduct taxes in our country, and not any separate “Foreign Tax ID Number”.
4. Does this mean I have to apply for US ITIN? Or my local tax number would work?

Thank you.

Sorry about the confusion, okstudios!

You should be presented with four options:

• U.S. Social Security Number (SSN)
• U.S. Employer Identification Number (EIN)
• Foreign Tax ID Number
• I will not or am unable to provide a Tax ID Number

It sounds like you have a local tax number, and therefore would select “Foreign Tax ID Number” (Because this is a US tax form, ‘foreign’ refers to non-US, and that’s where your local number goes).

If you didn’t have one, only then would you need a US ITIN.

@miseld

I provide my details last week, i’ve receive another email but It seems tax form in the author dashboard not working properly again when you select “I will not or am unable to provide a Tax ID Number”

Thanks for reporting this miseld and sorry for the inconvenience! I let our devs know and they’ve since fixed the issue. Please give it another try and let us know if you continue to experience problems. Thanks again!

@nickys

I have a few questions:

I’ve been to the US and I have a Social Security number and I entered that instead of Tax ID. Does that make any difference in the amount of tax that I pay?

Quote from the original blog post by Collis:

Ultimately growing in the key market of the US will lead to a larger revenue pool for authors on Envato Market.

I really want someone from Envato to expand of this. How exactly revenue can potentially go up when Envato is a US company? How will it attract more buyers? Practical examples please!

Does that mean even more transactions will show up in the Statement? I’m using the Envato API to create an app for tracking sales and it’s getting increasingly difficult to keep up with changes to the Statement. I wish we could avoid the constant breaking changes to the API, like first adding author fees, then separate transactions for item support, and now tax for US buyers. Some form of versioning for the API would go a long way. If someone is still using SalesRobot they should know what I’m talking about.

Hello! Here you go:

1. If you are completing a W-8 form, then US RWHT is based on country of residence (not whether you use a social security number).

2. This answer has come up a couple of times and been answered in previous forum Q&A. You can find a full list of all official Q&A posts with links in the opening post.

3. Yes, US RWHT deductions will show up in a separate line in the statement. Thanks for the useful feedback on the API - we’ve shared this internally with the team that owns it.

@Sonicbyte

@collis this means exactly what ?:

1- It means I will not be able to withdraw to Paypal without being charged in ALL my items sales with the new tax ?
2- it means I will not be able to withdraw anymore to paypal no mather what (like blocked by Envato) ??
3- If that is the case, should I turn my withdraw options to some other option like Payoneer, what should I do ?

Please I need a clarification on this.

THANKS

Hi Sonicbyte, it means we won’t be able to process withdrawals to any payment account (PayPal, Payoneer or SWIFT) that is located in a country that is different to the country of residence you register on your W-8 Form.

@ReyCommerce

@collis Since you’re limiting the multiple withdrawals options, do you take in consideration allowing us to move our themes to different accounts ? For example, i now have 2 themes with 1 partners. I would like to move one theme to their account.

Best regards,Stefan

Unfortunately this is not doable in our system. We’ve manually tried to do it a couple of times in the past and it involved a lot of workarounds, so we no longer can do even that. The system ties these records (of items and users) together very deeply in our application, as it wasn’t designed for moving items between users. This makes it really difficult, sorry!

@odiusfly

Thanks collis for the answers… I don’t understand above.Ok, we need to have 1 payment account for envato market + studio, cool!

Envato market is every 15 of month, and envato studio is every 7 of month. This method will change?I mean, something like merge of both earnings? Sorry, but i am little comfused…

Thanks again!

Actually, it’s OK for you to use different payment accounts for Envato Market and Envato Studio - sorry this wasn’t clear! We won’t be merging earnings and payment dates will remain as is for now. Hope this helps!

@themezkitchen

Dear @collis and @natman .

I have a somewhat “weird” situation. I’m acting as an individual here, but let’s suppose that I or somebody else here have a company (LLC) which is registered in Delaware, USA.

So what’s the situation there? I mean, because it’s the US based company, the owner is not an resident of the USA and also this company (which is legal of course) doesn’t have the bank account in the US, but in other European country.

Because Delaware as a state is the tax haven, and therefore this company doesn’t pay any taxes even in dealing with US buyers (except from the yearly based taxation), which form should this company needs to fill out here? And if so, which taxes are applied to this kind of company, if there any?

Thank you in advance for your response.

You should speak to your tax advisor for any advice on how to complete the form if you’re unsure.

If a US based person owns an account on Envato Market, they should complete a W-9 form and provide US payment details to which we will pay. No US RWHT will be applied.

@Nunforest

Hi, Collis my country is kosovo as i have declared in envato profile, but in paypal i have country albania and province kosovo, cause they have not added yet kosovo in their system, cause Kosovo is new country from 2007. Albania is near kosovo, will i have problem in W-8 form if I fill there kosovo?Will i have problem with withdrawings after that? Also i want to say that each of these countries Albania and Kosovo doesn’t have tax treaty with US, so it’s same payment 30%.

Payment details should match the account holder’s country. If PayPal isn’t working, you may wish to consider Swift, Skrill or Payoneer as an alternative option?

@MNKY

I want to fill W-8 form as a corporation. Can I use my personal Tax ID number, if I am the owner of the company? Or do I have to apply for Tax ID as a corporation?
Does bank account have to match Country of Incorporation or Permanent Residence Address?

You’ll need to talk to your tax advisor to determine the right tax ID number to use for your corporation as it’s highly dependent on your circumstances such as corporate structure and country.

We will apply US RWHT based on the country of residence of the account holder, and payment details should match that country of residence.

@OriginalEXE

Hello,

you already answered this about the sales, but I am interested about the withdrawals. Will the $$$ made in December be properly processed through multiple withdrawals set up for that month? I know that since January 1st only one withdrawal per month will be possible (so I assume multiple withdrawals UI will be removed), but will that affect the December -> January withdrawal, or those are safe?

Hello! The new withdrawal rules, like the tax changes, start from January 1st 2016, this will include the January processing of December payments.

@MusiDale

So, there is no way I can sell with Envato without having my personal info spread around on your invoices?

In that case it is sad because I would have to leave for that very reason. I am fine with the TIN and I have a 0 withholding rate so these changes would not really bother me, exept that I for a few very good reasons don`t want my real name to show up on those invoices!

Hi MusiDale, invoices will display:

first initial + last name OR business name (Will become optional shortly)
username
city/state/zipcode/country

To have a business name show up, you will need to have completed the W-8 or W-9 form as that business entity. We will be rolling out a feature to optionally hide the first initial + last name or business name and instead just show the username. Please note, if the invoice with only a username is insufficient to meet the buyer’s requirements, we may need to process a refund.

@Blackneron

Questions to Envato:

How can I contact all people who bought an item from me? I would like to give them my email address because I will be forced out of business at Codecanyon.The buyers could contact me if they have a problem with an item (especially the people who will buy an item between now and year end 2015). I don’t like the idea that they buy an item and the next day they can’t contact me anymore…

When do I have to send a request to the Help Team and schedule the final payout so that my items are available for sale until year end but not in 2016?

Envato writes that if I remove an item: “Once you have opted to remove the item, it may continue to be displayed for sale for up to 30 days. After 30 days the item will be removed.” Why is my item still sold if I removed it?

Hi Blackneron, sorry to hear that

Unfortunately, there’s no way for authors to directly contact buyers within our current system except when the buyer initiates contact. As an alternative, we recommend leaving a message on your profile page, item page and comments tab that says you are closing your account and includes the closure date as well as a way for buyers to get in touch later if they need help.

It’s also worth noting that if you support your items, you should fulfil all of your support commitments before closing your account. To do this you need to first disable support for your items and then maintain your account for an additional 12 months so that you can provide support to any buyer who may be eligible.

On your second question, unless you’re from a restricted country, you should be able to delete your items and request and receive withdrawals yourself (i.e., without contacting the help team). You can find instructions for how to remove your items in our help center.

I need to check up on your third question, and come back with an answer. Expect a follow up post in the next day or so.

Thanks!

[VF1]

@natman

It’s also worth noting that if you support your items, you should fulfil all of your support commitments before closing your account. To do this you need to first disable support for your items and then maintain your account for an additional 12 months so that you can provide support to any buyer who may be eligible.
[1]: https://help.market.envato.com/hc/en-us/articles/202821400-How-do-I-remove-my-items-for-sale-and-what-happens-when-I-do-

From the community blog:

However I understand that there will be some authors, affiliates and users who may find that this means that selling with Envato no longer makes sense. As always, it’s important for every user to weigh up their situation and consider what’s best for them.

In the above scenerio, why not postpone the entire new plans such as expanding into USA and adding withholding tax by 12 months from the date of announcement?

Sorry for the off-topic but this is inevitable here. By looking at unstable nature of marketplace system and author’s presence here (I don’t blame that), do we still have to commit for support packs that advertise/guarantees 6 months and 12 months etc? I say this from buyer perspective.

[odiusfly]

@natman

Actually, it’s OK for you to use different payment accounts for Envato Market and Envato Studio - sorry this wasn’t clear! We won’t be merging earnings and payment dates will remain as is for now. Hope this helps!

Thank you for your answer!

[miseld]

Tax form Works fine now, thanks

[abhimanyusharma003]

@natman @collis

I’m once again asking this.

After completing W-8 form, can I withdraw earning to different or someone else’s PayPal account which is also from same country. ?

Please let me know.

[ZookaStudio]

@LumenMedia

And newer changes also not bad too, because my country is signed agreement with US about taxes.

What’s your country? And with this agreement you still have to pay for 30% or not? I’m so confused, please ping me and help me to understand it.

Thanks alot.

[ZookaStudio]

I guess you need to fill the form first, then it will show the rate. For example: http://prntscr.com/8vtvh3
They are all in the list, but different rate.

[Mega-Music]

@natman i have provided details on my account > tax information. Is that everything we need to do?

[Delightthemes]

@natman @Dream_Theme
It appears that Limited Liability Partnerships can Use W8-BEN-E forms, then why partnership is not allowed?

fw8bene.pdf

A tax experts answer

As a Limited Liability Partnership in the UK, a business ran

@Dream_Theme
You can ask the online tax expert from above link. All the best.

[ilovemedia-es]

Hi! For Spain, do you know if the Foreign Tax ID Number is only the NIF number, or the letter ES before the NIF number?

[PurpleFog]

The Foreign Tax ID Number is just how Americans call the NIF number. So you should not have to add ES to it. For spain it should be 8 numbers and 1 letter.