Now Collecting VAT on Envato Market


#1

Hi everyone,

On January 1, 2015, the EU introduced new rules on value-added tax (VAT) collection. Envato will be determining, collecting and remitting VAT on Envato Market purchases by non VAT-registered EU buyers.

After months of community discussions and development work, we’re today releasing the final changes needed to calculate and apply EU VAT on Envato Market.

Read the full announcement

We’ve created this thread for questions and feedback, but before jumping in please:

  • Carefully read the announcement and help center articles
  • Go through Travis' post to check your question hasn’t already been answered
  • Keep in mind we can’t provide tax advice
  • Post in the relevant thread (off-topic posts will be removed)
  • Contribute in a way that’s respectful, constructive and in line with our guidelines

We’ll be touching base once a day to answer any new questions and on days that we’re not able to do this, we’ll be in touch to let you know.

Thanks for your cooperation!


#2

NOTICE: We will be collecting questions and answers here and updating this section as necessary. Please check here first before you post a new question as it could be answered already. Thanks!

Q: Most of the buyers gives false information, and the lack of verification (eg. A comparison with data from PayPal) may result in exclusion Envato from the MOSS, are you aware of this? If so what steps you’ll make to prevent it?

A: We track multiple data sources for verification and validation.

Q: Where we can find full Envato (in Europe) company details with EU-VAT number, address etc?

A: We don’t have a physical presence in Europe, but here are the address and MOSS details that appear on EU VAT invoices:

Address: Envato Pty Ltd, PO Box 16122, Collins Street West, Victoria 8007 Australia
ABN: 11 119 159 741
EU VAT Number: EU826409867

Q: What about Canada and some other countries that are not EU but may have a sales tax system?

A: Except where explicitly called out (such as EU VAT), indirect taxes are the responsibility of the author. (Click for more…)

Q:Can anyone explain what happens with non-EU authors VAT that Envato collect?

A: All EU VAT collected on Envato Market, regardless of whether the author is located within or outside of the EU, will be remitted by Envato to the EU via our VAT MOSS in the UK in our name.

Q: So now an EU buyer has to actually pay 20.52$ for an item with a 16$ price tag ? … am I correct?

A:The amount you pay depends on the EU VAT rate of the country where you’re located. However, you’re correct that EU VAT is exclusive to the purchase price and that EU buyers who don’t provide an EU VAT number will be paying more than in the past.

Q: I make use of a VAT exemption, what happens to the VAT which is collected on my items?

A: We’re currently looking through what VAT exemptions there in different member states and regions. (Click for more…)

Q: Can we have Author Terms in PDF format as a single all in one document?

A: Thanks for the request, we don’t currently have that feature planned, but will pass it on as a suggestion.

Q: Why Envato collect VAT from my EU buyers if I’m not from EU?

A: This is due to the EU’s new rules on VAT collection as of January 1st, 2015. (Click for more…)

Q: Can Envato do more by allowing businesses to prove their EU business status without a VAT number?

A: We are working on in our post-VAT VAT work including ways to confirm business status and exemptions beyond a VAT registration number. (Click for more…)


#3

Most of the buyers gives false information, and the lack of verification (eg. A comparison with data from PayPal) may result in exclusion Envato from the MOSS, are you aware of this? if so what steps you’ll make to prevent it?


#4

Finally active!

Let’s see how will affect the marketplace, so I can finally plan my future.

@Prestahome question is legit, do you have some system to check this?


#5

Hello
I would like to know what it will change for EU authors. Thanks


#6
LCweb said

@Prestahome question is legit, do you have some system to check this?

They can check if country is valid with current user IP, check with Credit Card data, PayPal data, there are few solutions, from what I know this is something very important and if Envato is registered in MOSS they’ll need to prove that buyer is currently in country where he claim he is.

Hello I would like to know what it will change for EU authors. Thanks

Maybe you should read blog post first, previous topics etc? this is a huge case, you should read all the announcement from Envato first


#7

For Avada $11.60 extra VAT :open_mouth:


#8

Thanks prestahome!

Even if it is bad news!

prestahome said
LCweb said

@Prestahome question is legit, do you have some system to check this?

They can check if country is valid with current user IP, check with Credit Card data, PayPal data, there are few solutions, from what I know this is something very important and if Envato is registered in MOSS they’ll need to prove that buyer is currently in country where he claim he is.

Hello I would like to know what it will change for EU authors. Thanks

Maybe you should read blog post first, previous topics etc? this is a huge case, you should read all the announcement from Envato first


#9
prestahome said

Most of the buyers gives false information, and the lack of verification (eg. A comparison with data from PayPal) may result in exclusion Envato from the MOSS, are you aware of this? if so what steps you’ll make to prevent it?

Thanks prestahome, we track multiple data sources for verification and validation.


#10
natman said
prestahome said

Most of the buyers gives false information, and the lack of verification (eg. A comparison with data from PayPal) may result in exclusion Envato from the MOSS, are you aware of this? if so what steps you’ll make to prevent it?

Thanks prestahome, we track multiple data sources for verification and validation.

Great :slight_smile:

One last question, where we can find full Envato (in Europe) company details with EU-VAT number, address etc?


#11

Hey high-volume authors, drop a waypoint in your analytics and let’s report some data how this has affected conversion rates after 30 days (not 2 days — I know the wolf cry is coming).


#12

I really hope this all goes well and that you plan to expand this once the kinks are worked out. I really don’t want the need to keep track of every invoice that comes through (that’s many a day!) but I am all for collecting tax. Prices in this marketplace are already incredibly competitive. Having to pay taxes on top of that (not to mention your commission rate) seems harsh. Fingers crossed!


#13
GravityDept said

Hey high-volume authors, drop a waypoint in your analytics and let’s report some data how this has affected conversion rates after 30 days (not 2 days — I know the wolf cry is coming).

Not that good with Analytics. Can you point me in the right direction for some learning material ?


#14

Yes as mentioned is going to be very interesting seeing how this is going to effect sales.
Hope not much.


#15
ThemeVillage said
GravityDept said

Hey high-volume authors, drop a waypoint in your analytics and let’s report some data how this has affected conversion rates after 30 days (not 2 days — I know the wolf cry is coming).

Not that good with Analytics. Can you point me in the right direction for some learning material ?

sales/visits. That’s your conversion rate. or $$/visits, that’s your traffic value.

15 seconds lesson :stuck_out_tongue:


#16

I’ve seen it mentioned several times that this is a 2015 change in the EU law, which I don’t think is quite correct. The actual 2015 change in the EU law refers to the place of supply: whether the supplier’s location is considered to be the place of supply or the buyer’s location is considered to be the place of supply. Before 2015, the supplier’s place was considered to be the place of supply, so VAT had to be charged at the rate of the country where the supplier is registered, but, as of 2015, the buyer’s place is considered to be the place of supply, so VAT has to be charged at the rate of the country where the buyer resides.

Who is considered to be the actual supplier is not changed by the new law, there are only some new clarifications. Article 28 from Directive 2006/112/EC of 28 November 2006 states this: “Where a taxable person acting in his own name but on behalf of another person takes part in a supply of services, he shall be deemed to have received and supplied those services himself.” So, from my understanding, even according to the old law, Envato is considered the supplier. In the new law, there are some additions that elaborate on Article 28 from the old law:

"For the application of Article 28 of Directive 2006/112/EC, where electronically supplied services are supplied through a telecommunications network, an interface or a portal such as a marketplace for applications, a taxable person taking part in that supply shall be presumed to be acting in his own name but on behalf of the provider of those services unless that provider is explicitly indicated as the supplier by that taxable person and that is reflected in the contractual arrangements between the parties.
In order to regard the provider of electronically supplied services as being explicitly indicated as the supplier of those services by the taxable person, the following conditions shall be met:

(a) the invoice issued or made available by each taxable person taking part in the supply of the electronically supplied services must identify such services and the supplier thereof;

(b) the bill or receipt issued or made available to the customer must identify the electronically supplied services and the supplier thereof.

For the purposes of this paragraph, a taxable person who, with regard to a supply of electronically supplied services, authorises the charge to the customer or the delivery of the services, or sets the general terms and conditions of the supply, shall not be permitted to explicitly indicate another person as the supplier of those services."

The text can be found here, in Article 1 > Article 9a.


#17

What about Canada and some other countries that are not EU but may have a sales tax system. Are you supposed to include it in invoicing?


#18

Very poorly planned. I would have thought some notice would have at least pre warned those affected and would no doubt have resulted in additional sales during this period. To just implement it overnight makes no sense at all.

I would have personally bought more items, now I will be more selective given the items will cost 20% more. Had envato put any thought into it they would have announced a date and given people the opportunity to save money.

I can only speak on a personally basis as someone who is affected, registering for VAT is something I want to avoid as I would then need to charge VAT on my prices. It is a good time to make friends with people in countries outside the US have them buy the item (and repay them) and send it to you along with the purchase code.

Anyway poorly handled envato.

As for collecting VAT on items from non EU residents not sure that falls under MOSS or should even be allowed. Hopefully authors post their website urls in their profiles and I will buy direct and bypass envato and save 20%. It will be interesting to see how sales go, but given the fact zero noice has been given, I expect a drop in sales across the board.


#19
thepainterman said

As for collecting VAT on items from non EU residents not sure that falls under MOSS or should even be allowed. Hopefully authors post their website urls in their profiles and I will buy direct and bypass envato and save 20%. It will be interesting to see how sales go, but given the fact zero noice has been given, I expect a drop in sales across the board.

Notice was given from last year… In the last months they created a lot of blog posts about this.

And about extra VAT for EU authors, all stores are doing it. Haven’t you ever purchased something online? Just try to purchase WinZip for example… You’ll have to pay the price + VAT based on your country. I pay VAT on almost all of my digital purchases outside Envato (hosting, applications, services, etc.).


#20
thepainterman said

Hopefully authors post their website urls in their profiles and I will buy direct and bypass envato and save 20%. It will be interesting to see how sales go, but given the fact zero noice has been given, I expect a drop in sales across the board.

Hi there,

You need to know that most authors are exclusive on Graphicriver so they can’t sell it outside. Even if they do it breaking the agreement, they need to add VAT, register to MOSS and pay the same VAT directly, so there is no option that you can buy cheaper the same item.

Have a nice day!