What is "US Backup Withholding Tax"?

From Envato Tax FAQ
What happens if I don’t complete my tax info until after withholding starts?
Any amounts withheld prior to receiving your tax information will be sent to the IRS.

Hi everyone! US Backup Withholding Tax is getting from my every sales
I did not fill the W8 form in December

then If i going to fill now ,
Is US withholding tax going to be fine? help me!!!

Yes, if you complete a W-8 form, you’ll no longer have 28% withheld on all sales, but you’ll have 0%-30% withheld on US sales (it depends on where you live and whether you’ll submit a Tax ID Number or not).

Thank you very much!!!

No worries :slightly_smiling:

1 Like

Hi Guys,

So i have filled in a W-8 form with My UTR (I am British), but i am still getting Backup Withholding Tax taken from my sales? I can see from my stats that the majority of my sales are coming from other European countries, with only a few sales from USA, But i am getting charged on every sale.

Does anyone know why this might be? WIl i get the tax back i have already been charged?

Thanks,
Danyo

Did you Submitted W-8 Form With valid Tax ID ?
and also did you Filled details on tax info page ? https://themeforest.net/user/danyo/tax_information/new

I am from the Isle of Man (I have filled out the W8 with foreign tax ID IOM has treaty with US) I am not getting withheld on EU sales but I have just had 1 US sale and they withheld the tax on that one.

Not happy about getting withheld on US sales :S

From a $6 sale I got $1.25 or something close to that, not worth my time to be honest.

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Yes submitted a W-8 with valid UTR, still getting charged…

It’s a bit ridiculous really… basically paying tax twice as i already pay tax on profit in the UK.

Yep its honestly not worth doing at that rate.

I completely agree with you. How funny is that every time something grows it’s getting worse. I’m just waiting for introductions of fee if you want your item to be promoted on search results (like on ebay) then you will have to provide birth certificate of your parents for licensing items in Madagascar and so.

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same in here… it is funny that my friend filled the same form with me and there is no charge on his side… :frowning:

they will take 30% of your gains if u have some … if u fulfill the W8 and say not provided and u ask for a ITIN or EIN then they will take fees according to treaties and only in US sales … which is way better for authors indeed

Hi - I am in the UK and have found this enlightening… So I think what I have to do is register for a tax code here and then complete the US W8 tax form…

However, I don’t understand the “Maths” by Envato. On a $19 track they start with a gross amount of $15.20 and THEN deduct the US Withholding Tax and the fees… leaving just over $5 for me. Why does it go from $19 to $15.20 though?

Thanks in advance

Graham

$19 is the list price, the amount the buyer pays. That $19 is made up of a buyer fee, an author fee and your net earnings. The buyer fee is 20% of the list price, so in your example, it’s $3.80. Deduct the buyer’s fee of $3.80 from the list price, and you get the item price, which is of $15.20.

Thanks for clarifying!

Did you get pay back? I also wonder if you have already been charged US taxes. will it be refund after we fill out W-8 form with EIN ?

From Envato Help Center:
Any amounts withheld prior to receiving your tax information will be sent to the IRS.

Details

I am not sure what it means. can you please give me little more details if I can get back the amount of tax which already have been charged before I complete w-8 form. it’s big amount for us.