Hi all,
I’m trying to figure out the correct way to handle taxes for my Envato (CodeCanyon) sales and author fees. I studied help pages and forums posts for hours but I’m still not sure 100% if I understood everything correctly. Of course I will discuss that with my tax accountant but before doing that I have to make sure that my assumptions are correct.
Could anybody please help here and give feedback?
My situation:
- EU-citizen (Germany)
- Paying sales tax (“Umsatzsteuer”)
- monthly doing a turnover tax advance return (“Umsatzsteuervoranmeldung”) including a cash-basis accounting (“Einnahmen-Überschuss-Rechnung”)
- Submitted Form W-8 with my foreign tax ID number (“Steueridentifikationsnummer”)
My assumption for handling taxes in my situation:
- All earnings from Envato are net and VAT-exempt (“umsatzsteuerfreie Betriebseinnahmen”)
- All fees from Envato are net and VAT-exempt (“umsatzsteuerfreie Betriebsausgaben”)
- Since earnings and fees are non-VAT, I don’t have to include them in my turnover tax advance return, but simply include them as net amounts in my cash-basis accounting (“EÜR”)
- For documentation reasons I simply download the invoices from my sales and the invoices for my fees
- For EU-customers, Envato acts as the supplier and adds VAT to customer invoices. Although this VAT does not effect me but only Envato and the customer. Therefore I don’t see my VAT-ID on customer invoices or author fee invoices.
- For US-customers, Envato lists withholding taxes (“Ausländische Quellsteuer”) which I include in my income tax return (“Einkommensteuererklärung”) and deduct it from my paid taxes.
Sources:
- Author fee invoices are non-VAT, help article from Envato
- Earnings are net and VAT-free, post by @Sealord
- Withholding Taxes, post by @Sealord
Is that correct so far?
Thank you so much in advance!