Will be subject to a 30% withholding rate on your U.S. sales.

No, you won’t get it back. However, Envato will provide you with a tax summary you can then submit to your own tax administration and you may be able to get a tax credit (depending on your country’s policy).

Thank you for your reply.
Merci de votre réponse :slight_smile:

In the end would that mean that Hasenmusic was right saying (if I may quote) „Does this mean that
on US sales I will only receive 20% of the sale price as earnings?“

So its a new way to get more money for Envato I guess. Like their fee isn’t already astronomical.

No. You don’t get 30% taken from the list price, you get 30% taken from the item price. See explanation above. So the final percentage amount you get depends on what you’re selling, whether it’s subject to ADP (and if so, what you’ve priced it at) and how much you have sold in total.

But this hasn’t begun yet right? Its next year I thought.

You’re not mistaken…

Yeah that’s what I thought but BluePaw was talking about getting the tax back so he had me thinking it had already started.

You’re both right. It hasn’t started yet, but as PurpleFog says… Envato will provide you with a tax summary you can then submit to your own tax administration and you may be able to get a tax credit.

Maybe I am totally wrong, but I thought due to this form you get the tax back. Or at least some of it. But it seems that PurpleFogSound already made experiences about that. At least in France this form only serves to get a tax credit - if at all. And if I conclude SpaceStockFootage’s coment correctly, authors like us face a realistic net income of 26%

First of all, thank you for your explanations. Highly appreciated!

About the issue:
That would be completely useless for me since I already belong to the lowest income category (shame on me, I wish it would be different). It means nothing more than that I get even less for my work. And many authors as well I assume.

Just to clarify: This is the first year US Tax has been applied and the tax summaries have not been sent out yet. So no-one has any experience with what you can get back with those from your own tax administration. It could be tax credit, checks in the mail (unlikely), cash in hands (unlikely), or plain nothing. You’ll have to ask your fiscal administration to know what to expect.

Yes no one has experience in Audiojungle but in the other Envato forums people are already talking about it. They get 30% taken off of ALL sales, not just ones made in the US since you’d be treated as a US resident.

If so, I don’t understand your previous post:

“No, you won’t get it back. However, Envato will provide you with a tax summary you can then submit to your own tax administration and you may be able to get a tax credit (depending on your country’s policy).”

At least for me it seemed that you already had experience. But it’s rather the fact that no one knows. So let’s see…

The rules apply to all of Envato not just Audiojungle. Authors who get taxed on all their sales simply did not submit the W8 form.

All I’m saying is that neither the IRS nor Envato will give back taxes collected before you submitted your tax information. What you may or may not get back from your country’s fiscal administration will depend entirely on your administration policy. I was talking about tax credit as it would be the most likely way a fiscal administration would operate.

That’s my understanding as well. Although I don’t know for certain, yet, I’m strongly of the opinion that you won’t be getting anything back from Envato, and you won’t be getting anything back from the US government… and you probably won’t ‘get anything back’ from your own government either. However, you will get an official document from Envato stating how much tax you have paid, and you may be able to use that as a tax credit. I.e. if you owe $10,000 tax in your own country, and you’ve paid $5,000 through Envato… then you might only have to pay $5,000.

That’s the most likely outcome for anyone in a country that has a tax treaty with the US. If your country doesn’t have a tax treaty with the US (a lot do, even if that tax treaty results in you paying 30% - the same as a country that doesn’t have a tax treaty) then it might not be so easy. They may not recognise those payments.

But still… I’m sure info will start rolling into the forums when people do start submitting tax returns in the new year.

And just to note… the people that say they are getting 30% taxed on all sales… they’re usually new and haven’t filled out the relevant section in their tax settings. And it’s 28% on all sales, not 30%. It’s only 30% on all US sales when you fill out a W8 but don’t include a valid foreign tax ID.

(this post is for everyone, not just you PurpleFog, I know you know most of this!)

I am not one of those saying that all sales are taxed 30%. But I have to admit that I feel a bit lost with these US tax issues. I read the explanations of the the US tax authorities (quite a challenge for a non native speaker) and I am trying to understand it step by step. However, one question remains:
AudioJungle (Envato) holds back a percentage (let’s say 28%, the amount is not relevant in this question) of sales to US customers. What happens with this withheld amount? Does it remain with Envato or will it be transfered to the US tax administration?
In both cases someone benefits from me additionally since neither the US authority nor Envato will me pay back the withheld amount. And since I belong to the lowest tax class (as already mentioned), tax credit will not apply for me and I will not getting back anything. As a conclusion - and again - Hasenmusic was probably right. There is only a 20% (or 22%) net income when seeling to US cstomers - as an exclusive author! Unless you are a top author with huge sales. This should not be trivialized

You live in France, right? US Tax Treaty Rate: 0%
I was registered in the Philippines until two days ago.
US Tax Treaty Rate: 15 - 28%

The question is where does all this withheld tax go?

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Yes I know the US tax treaty with France is 0%. I don’t really get what you mean by that though.

The tax withheld is remitted to the IRS. Envato can only comply with US tax laws.