Hi,
I have troubles to understand the tax I must pay as author to my government (I’m in Italy)
I will need to hire some dev for support my Envato items but I have problem to understand the tax and invoices.
I see I can pay someone directly from Envato by make a new withdrowas, I want do this for my support team member but when I go to https://themeforest.net/user/USERNAME/statement and I download an invoice seem they calculate all my sales earnings:
My questions are:
- How my earnings are managed by Envato? Seem like: User pay directly Envato from my sales --> Envato send me these invoices due I paid Envato --> Envato pay me again. But how this is possible? Users pay Envato not me so why these invoices?
- So seem that until my earnings are into Envato I not earned nothing for the law and until my earnings are into Envato I must not pay any tax as freelancer or other to my country. Is this correct?
So I want understand what I must provide to my accountant for pay the correct taxes? I must create myself an Invoice for the money received by Envato?
I hope someone can give me some information otherwise no problem.
Thank you!
You sell on Envato’s marketplace and have a gross income each month. You can see the gross income on the monthly invoices (sales column). The sum of each monthly gross income is your gross income of the year and this gross income is subject to income tax in your country. As a freelancer you can deduct your business expences from this gross income, the business expences are the author fee you paid each month (amount column).
gross income - business expences = taxable income
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Thank you for fast and clear answer. Anyway this not answer to my questions.
An invoice is sent to a person A only if this person pay to B (company or freelancer) some amount of money, NOT the inverse. So Envato should not send me any invoice instead I should send to Envato my invoices due Envato paid me.
The withdraw to an external figure directly from Envato still generate problems. If I pay someone with Envato with my credits the invoice will still report all earnings without remove the payment I did to my team member.
Thank you anyway!
Wouldn’t it be best to ask your accountant what they need for you to pay the correct taxes?
And so it is in this case here, there is nothing inverse. Envato (B) provides you each month a invoice about the author fee you (A) paid.
Since February 2014 there has been no revenue from commission sales on this market. Envato is no longer the direct source of income, the revenues flow from the buyer via Envato into your account. In financial terms, Envato act as an intermediate entity.
It makes no sense to send Envato an invoice because you do not sell commercial business or services to Envato. But you do this for the customers and Envato in form as the intermediate entity send to the buyer the invoice on your behalf. That is the invoice for each sale, viewable for each sale in the statements. If you need these invoices for your accounting, you can print each out.
Envato can’t deduct such withdrawals because that’s your taxable income even if you pay a third person from this income. It is up to you how you do your accounting of such payments to third persons. From a tax perspective, these payments are one of your business expenses and you can deduct them from your taxable income.
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Thank you for the professional and clear answer. Now I understood better.
I will ask confirmation to my accountant but unfortunately I’m pretty sure you are right.
Thank you!
