Why Envato does not exclude their fees from authors’ tax base?

and expanding a market which is providing more than 70 percent of sales for most of the guys lol

I don’t think that anybody or anything prevented a USA citizen buying from Envato before.

Yes, but this way, we pay their taxes for their author-fee(which happens to be their main income).

who said so and why they would anyway? i don’t see any correlation with what i said indeed

it doesn’t matter what names you give to what…

according to the tax treaty, I am required to pay %10 of “my income”, not envato’s income…

you can call it “author fee” but it is envato’s income and they are the ones responsible for it…

if envato is Australian:

  • they have to pay %5 according to the treaty between Australia and US…

if they are American now,

  • they don’t have to pay %5, but only pay whatever US requires them to pay as income tax…

giving it fancy names doesn’t make it right…

I believe corporation tax in the US is 35%.


that has nothing to do with what I said…

What I said was:
If you are an Australian company(which apparently you are not now) you don’t pay American corporation tax, you pay the Australian one + %5 for sales made to US buyers…

and if you are an American company “now” you only pay %35 or whatever it is… I never said anything against that…

You said “whatever US requires them to pay as income tax.” I’d say that clarifying what the ‘whatever’ equates, to has at least something to do with what you said.

Likewise, I never said anything against what you said, I was just ‘filling in the blanks’ when it came to your figures.

oh ok…

thanks, and sorry for my misunderstanding…

No worries.

Here is this tax described:

The interesting part:

Tax Treatment of FDAP Income Which is Not Effectively Connected Income (ECI)
Tax at a 30% (or lower treaty) rate applies to FDAP income or gains from U.S. sources, but only if they are not effectively connected with your U.S. trade or business. The 30% (or lower treaty) rate applies to the gross amount of U.S. source fixed or determinable, annual or periodical gains, profits, or income. Deductions and netting are not allowed against FDAP income.

The gross amount of a sale here is the item price.
The IRS do not care that Envato also use the gross amount for its calculation of the author fees.

Given that an author (level 1) sells a $100 item, the calculation options are:

Current method and complient with the US federal tax rules
$100 - 20% = $80 -> $20 buyer fee
$80 - 30% = $56 -> $24 us tax
$80 - 37.5% = $50 -> $30 author fee
$80 - $24 - $30 = $26 earnings

Alternative method, authors fee excluded from tax - complient with the US federal tax rules
$100 - 20% = $80 -> $20 buyer fee
$80 - 30% = $56 -> $24 us tax
$56 - 37.5% = $35 -> $21 author fee
= $35 earnings
means lower income for Envato

Alternative method, authors fee calculated before us tax and deducted - not complient with the US federal tax rules
$100 - 20% = $80 -> $20 buyer fee
$80 - 37.5% = $50 -> $30 author fee
$50 - 30% = $35 -> $15 us tax
= $35 earnings
means IRS would not be happy

In both alternative methodes the authors earnings are the same.

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Waiting someone at Envato can answer authors questions.

Scott already did , among others … but the fact of the matter is that i don’t think that u are ever told the kind of explanation that u really want …

Let’s face it. That’s it!

Envato knows that there is nothging we can do. All we can do is to wait and see if and when the sales will increase

Until then start working, because you are wasting your time asking questions that won’t give you any answer…

They have to many authors and they need to trim some :smiley:

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hmm… Authors should be productive, that’s one thing but we better be concious about changes and impacts on future.

And… By the time the benefits of US sales hitting here, there could be a dozen new headaches diverting us from work. Personally I stopped depending only on Envato’s income from when they tried to impose mandatory item support “and” started claiming authors as direct sellers (Note that in the past if there was no discussions happened on forum, right now authors could be under a mandatory support system). Envato is very concious about their future, so no wonder if authors spend some time to make questions on forum.

Yes But I realiaze that no matter what we ask or we do Envato doesn’t listen to us so why wasting my time ?

This is probably end of my account.

u should join the corporatist thread out there lol envato is a great & professional market place sure that they will like u there lol

Envato it is a great place, lots of money can be made but this doesn’t mean I agree @n2n44

indeed, this is good place as i use to mention but ,a s i use to mention also that doesn’t mean that this is perfect or that nothing can be embettered. Now as for the big money being made, judging by what i was told in my dashboard shortly ago, i was ranked something like 985 or something like this i don’t pay too much attention about to remember well and what i can tell is that i am very far form being making a decent revenue out of my work here so basically some guys strike big , all the others collect what they can but that’s not that huge