It’s true for Project KST, as he’s in Russia. As Osama explained, the withholding amount is taken from the item price, not from your earnings after fees. As for why that is, I’m not really sure.
SpaceStock, that’s not the point! The point is that we pay Envato’s taxes. Period!
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Well it is the point, because Project KST wasn’t happy that he was having taxes withheld, and he was under the impression that Envato and/or the IRS would be reporting his earnings to the Russian tax authorities. The last part isn’t correct, and the first part can be remedied by adding his tax ID to the W8 form. That was the issue and that’s the issue I have addressed. At no point have I commented on whether anybody should, or is, or will be, paying Envato’s taxes.
Well, I am paying their taxes. And I’m not really sure of the last part being correct or incorrect, there’s literally, no way of knowing.
It doesn’t matter if I(or Project KST, or anybody) have or have not added a tax id to the W8 form. Envato should calculate the Royalty witholding tax from MY earnings, not MINE and ENVATO’S. That is the issue.
I know you HAVE to be the devil’s advocate, but stop patronizing us(or just me) or pretending you don’t understand the issue.
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I’m not patronizing anyone… Project wasn’t happy about paying taxes so I provided a solution so he wouldn’t have to pay any taxes. My advice to him doesn’t work for everyone, but it is correct for people in Russia.
Why authors have to pay taxes on the author fee which they never see, I have no idea. I understand the issue, but as I have no idea why Envato are taxing people on the author fee, or whether they should be taxing people on the author fee… there’s not much point in me addressing it. I can give an opinion on whether it’s wrong or right, but that’s not going to change anything.
I agree…
yes SpaceStock, you are right… but let’s forget about that now…
what’s important here is that we are paying envato’s taxes… and this is an issue that needs to be addressed…
I think this is a mistake given envato’s good track record… I have faith they will fix it…
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My questions is, incase of author with 0% tax who’s pay the tax for the author fee?
if envato pay why author with 30% tax should pay the tax of author fee?
so really it’s not fair one author pay and the other not paying anything so how this happen?
@SpaceStockFootage, I guess the culprit is the Fee system introduced in the recent times. Other marketplaces I noticed so far counts US Royalty withholding tax only from author’s share. We had commission system for many years but buried without trace (look at the old forum threads by google search). No wonder the tough and complex Fee system has some intended purposes to relieve tax burden or whatever for Envato (we have logical reasons to make such assumption). This is not a complaint but just wanted to explain that system is not so perfect or balanced as you seems to claim.
In fact I’m not happy about Envato’s fee is declared as my income.
We’ve covered that already…
I never said it was perfect or balanced. I recall mentioning that the change to the fee structure had to be tax related when it first came out… it was far too complicated for it to be anything else.
Well it doesn’t make sense…
I don’t think wording it differently gives anyone the right to make us pay their taxes.
it should be corrected…
I don’t think it will be corrected. I think this is the reason they moved to USA: to increase profits(unfortunately, on our expense). At the moment, I don’t see any other logical reason.
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because authors are getting the job done and they are source of revenue for all … but almost except for themselves now, as they sometimes get very reduced amounts and percents (for non exclusive authors) … no one wants to reduce their good earnings, but the guys who work have to … . Authors have no choice and get “rewarded” for their faithfulness and dedication by having their money reduced lol . Besides, we were also told that the move would be beneficial as the market would be even more profitable (by developing a market already more tan developed lol) … did any one see this this far ? i personally did not notice anything much this side … but we all noticed that we have additional taxes instead lol
as if all authors had an accountant lol for this, they would have to be having a company status to lay on … which is far from being what happens with all authors indeed …
well this is true , but u have forgotten the additional local taxes lol
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Be in mind this is no more a commission based marketplace, it changed last year to the buyer-/author-fee model and put the authors into the role of a seller who use a marketplace as a service platform.
What gross income now generates such a model if a non-US-author sells here to a US-buyer?
US-buyer pays buyer-fee = taxable gross icome for Envato
Author-fee = taxable gross income for Envato
Item-Price = taxable gross income for Author
Author pays withholding tax ( 0 - 30% ) of item-price to the USA because the item price is the gross income.
Author pays also national income tax on this gross but can deduct the author-fee and in most cases also the already paid us withholding tax (ask a tax advisor how this can be done in your country)
Envato has the two types of gross income from such a sale, the buyer-fee and the author-fee and must pay taxes on this too. Maybe they can split this and pay taxes in the US only for the buyer-fee and taxes in Australia for the author-fee because the author-fee comes from a non-US-source.
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well u can also wander why u have to pay additional taxes because us customers buy form u , too … for me it has always sound weird but this is the way it is … the problem is not so much about all this , this is that it was already difficult to make decent money out of marketplaces, but with additional fees and so on, u have only two alternatives , i.e: raising the prices and accepting to sell less and to discourage some buyers in one side, on the other hand, accept to have even less money and have the percent of guys who get the job done getting down all others , or almost …
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.