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.
any money would be paid to the US government at the end of the tax year which is December 31st (US tax year).
The tax is withheld in name but not in reality, if an author doesn’t declare their home nation then they are treated as someone who doesn’t live in a location with a US treaty and therefor is subject to the maximum tax of 30%.
If a sale has happened before you have declared your location, you will still be liable for the 30% tax as your status wasn’t defined at the time of the sale. You won’t be able to get a refund on that tax paid either (be a lot of paperwork for Envato).
Ok, I tell you what I mean.
Are you familiar with the term “research”?
If not, a very brief explanation:
Whenever you publish something, be it verbal or written, it must be consolidated with facts or at least with credible quotations. If it is not, it is either chatter. Or worse - academic dishonesty.
I assume, of course, that you have read the complete statements of the US tax authorities and can also quote.
May I ask if this is an official statement from Envato?
Jeez man, that escalated quickly!
Alright thanks for the “academic dishonesty”. I wasn’t aware I was publishing a paper on US Tax law. I was just trying to help. Sorry you took offense and good luck 
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No offence man.
The whole story is simply stressful, because in my case I face a loss of almost 30%.
I simply dependent on facts.
But I love France!
(And I miss the baguettes, the Pastis, listening Gainsbourg/Asnavour/Gall/Sardou/Kaas/Goldman,
savoring THE red wine (and the French cuisine in general
of course not, that’s just how the system works, others have asked on the forums about refunds on the tax paid and been told it’s not possible so i would say it’s pretty much guaranteed you won’t get a refund as you made the mistake of not updating your profile to reflect your living status.
You may get a reimbursement from your tax in your home country when Envato provide you with documentation that you paid tax in the US but it depends on your countries own tax rules. Speak to an accountant or tax advisor for help with stuff like this.
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I wouldn’t’ call it a mistake since I had no other address that I could provide before.
But I agree with you that I will have to contact a tax advisor.
Thanks for your answer, highly appreciated.
Just in the spirit of sharing my particular situation:
I reside in a country that has no tax treaty with the US at all. Therefore, I am subject to the maximum withholding rate (I completed the W8 form already). A concrete example: today I sold a $15 item and received only $4,05. I understand this is simply how the system works, yet I can’t help to find it quite discouraging. Luckily this doesn’t applies when selling to non-US buyers.
Is anyone in a similar scenario?
Thanks guys!