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Author Topic: Envato want to be a reseller and makes the contributor to the seller!?  (Read 27928 times)

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« on: February 04, 2015, 15:34 »
+5
Envato sees himself only as a platform between the contributor (seller) and buyers.

- This means you are seller and every buyer needs an invoice from the contributor.

- "When you sell on Envato Market, you are selling to the buyer via our platform. Therefore the whole sale is income you should recognize with      an expense (our author fee)".

- Envato automatically writes bills on behalf of the contributors to the buyer.
http://codecanyon.net/forums/thread/new-statements-invoices-february-1st-2015/159252?page=7 (Web-Wizards post)


You can read it in the envato forum (post from collis):

http://codecanyon.net/forums/thread/new-statements-invoices-february-1st-2015/159252?page=20


I'll probably get off at Envato....

« Last Edit: February 04, 2015, 15:39 by R2D2 »


« Reply #1 on: February 04, 2015, 15:55 »
+4
Seems pretty lazy.

« Reply #2 on: February 04, 2015, 16:48 »
+1
It makes no sense at all to me.  I started late with them and with low sales and weird rejections haven't made a payout so I'm not sure what they report for tax purposes.  If they report the whole amount as income then it probably isn't worth bothering with them.  Does anybody know how this is handled at tax time?

« Reply #3 on: February 04, 2015, 17:24 »
0
Does anybody know how this is handled at tax time?

My guess would be you pay your taxes as normal, they ignore it and get fined because it is easier to chase one big fish rather than a bunch of smaller ones. That's just a guess though. I really have no idea.

« Reply #4 on: February 04, 2015, 17:25 »
+8
They're in Australia, I'm in the US, so I've never had a report from them for the income there. I use my royalties as my income (not the amount the buyer paid) and I plan to keep doing that regardless of what they are doing with the crazy accounting.

I also sell via Creative Market and they (on site; haven't received anything from them for tax paperwork probably because I'm new to the site and earned so little in 2014) report total revenues and "Your earnings". Perhaps someone who has been there longer would know which numbers they report on 1099s

I think they've got this all wrong, especially with respect to Photo Dune (given that they're acting like an agency with uniform pricing and an approval process).

fujiko

« Reply #5 on: February 05, 2015, 05:45 »
0
What about European contributors? If they are selling directly they are accountable for VAT, not Envato. Will Envato forward the VAT to European contributors?

« Reply #6 on: February 05, 2015, 06:00 »
+3
Good news is they will be taking a a much smaller percentage as they are only offering a sales platform, not providing services as an agent, right?

« Reply #7 on: February 05, 2015, 10:15 »
0
Good news is they will be taking a a much smaller percentage as they are only offering a sales platform, not providing services as an agent, right?

 ;D

« Reply #8 on: February 05, 2015, 13:02 »
0
Good news is they will be taking a a much smaller percentage as they are only offering a sales platform, not providing services as an agent, right?

LOL!

« Reply #9 on: February 07, 2015, 13:16 »
+2
What about European contributors? If they are selling directly they are accountable for VAT, not Envato. Will Envato forward the VAT to European contributors?


It looks as if Envato pay VAT for authors.
Nevertheless, the constellation is problematic.
With respect to the VAT Envato behaves like a seller.
With respect to the INCOME Envato just wants to be a "platform".

I find it problematic and whether this is possible in the EU i can not imagine


Someone has made a nice schematic showing the problem (post from Cocomero):

http://codecanyon.net/forums/thread/author-information-about-eu-vat-changes/160108?page=11




« Last Edit: February 07, 2015, 13:18 by R2D2 »

Tror

« Reply #10 on: February 07, 2015, 14:19 »
+11
Envato is currently actively breaking the law of most relevant countries. Anyone submitting to photodune may reconsider their relationship with them as it is very possible that they are breaking the law and drag you into legal problems on the long run - this has nothing to do with wether you are from the EU or not. On the below I consciously leave out all the VAT subject.

Ask yourself the following questions:

1. Do you report the full sales price of a image / item (not the commission from Envato) as revenue to your local Tax Authorities? If not you are committing a tax fraud.
Envato currently insists that the complete sales price is YOUR income and you have to deduct later their commission as your expense.

2. If you are obligated to write invoices: Do you write a invoice for each and every photo sale on photodune? If not it is likely that you are violating your local tax law since Envato insists that YOU have to issue a invoice for every sale and indeed acts like this on your behalf.

3. Do invoices in your country have to follow certain guidelines like including certain data, be numbered, be issued by a governmental authority, have a certain formatting etc. ? If so, it is almost for sure that the invoices Envato handles "on your behalf" are invalid and you are violating local regulations. In consequence, you are breaking the law.

To me it is unbelievable how filthy Envato acts here just to escape certain book keeping obligations. I lost all my trust and they cannot be considered anymore a legally operating business if they continue with their current paradigm.
« Last Edit: February 07, 2015, 15:08 by Tror »

« Reply #11 on: February 07, 2015, 21:40 »
+12
...
1. Do you report the full sales price of a image / item (not the commission from Envato) as revenue to your local Tax Authorities? If not you are committing a tax fraud.
Envato currently insists that the complete sales price is YOUR income and you have to deduct later their commission as your expense.

I'm in the US and I'm not a lawyer, but I think that regardless of what Envato calls the money they pay us, I think I have a reasonable case that the money I receive from them (especially as I don't know who the buyer is or have any possibility to influence the price or terms of this "sale" I made to the unnamed buyer) is my income, not the amount the buyer paid Envato.

Just because they call it something doesn't make it so.

There are a number of situations - companies that tried to call hourly workers managers to avoid paying them overtime, for example - where one party tries to change the definition of a transaction so that it contradicts what's actually happening. I think that's what Envato is trying to do.

I will stay for the moment, but if I thought for one second that I'd have any tax issues as a result of them trying to impute income to me beyond my royalties, I'll leave.

« Reply #12 on: February 07, 2015, 21:59 »
0
I don't know about other countries, but in the US if you list the full price as income and then deduct off the Envato charges, the amount you will have to worry about paying tax on is the same as if you just listed your net profit from Envato.  For the IRS it depends on what Envato lists as income in the appropriate box.  If they also provide the amount deducted from that then it will be easy either way at tax time I suppose.  I only have a few images online there and haven't got to payout so haven't had to deal with it yet.

« Reply #13 on: February 07, 2015, 23:54 »
+1
I don't know about other countries, but in the US if you list the full price as income and then deduct off the Envato charges, the amount you will have to worry about paying tax on is the same as if you just listed your net profit from Envato.  For the IRS it depends on what Envato lists as income in the appropriate box.  If they also provide the amount deducted from that then it will be easy either way at tax time I suppose.  I only have a few images online there and haven't got to payout so haven't had to deal with it yet.

Envato says their putting the US tax reporting issue on hold for now and not issuing 1099s.  Probably some accountant showed them they don't have US tax law right.

Semmick Photo

« Reply #14 on: February 08, 2015, 03:09 »
+12
Again the little man/amateur probably wont have a clue what Envato is up to and they keep submitting etc., but I wonder what the big players, factories and tax savvy contributors will do. No one will accept the fact that the price the buyer paid is their taxable income and no one will accept having to send invoices for every single sale to an unknown buyer.

If Envato is only a platform now, they need to stop reviewing my images and forward me all buyer details for every sale, and cut their fees significantly. There are more platforms out there, they only take between 10-30%, not 50% or more. 

I cant see how this is going to benefit Envato. Probably have to cut my loses and leave. In the mean time, I hope Karma does its trick.

« Reply #15 on: February 08, 2015, 03:15 »
+12
They must be joking. I will not bear such a huge administrative burden with invoices and increased tax base just for couple of pennies from Photodune :-(

Semmick Photo

« Reply #16 on: February 08, 2015, 03:41 »
+5
 Here are some comments that sum it up pretty nicely

http://photodune.net/forums/thread/envato-market-the-platform/159256?page=4

Seems that what Envato is doing is completely illegal. As Tror pointed out.

« Reply #17 on: February 08, 2015, 05:00 »
+8
I agree with JoAnne.  Claim the total, subject their commission.  Or claim the net.  Doesn't matter, same both ways.  Doesn't matter what they call it.  I claim the amount that ends up in my account, period.

Semmick Photo

« Reply #18 on: February 08, 2015, 05:45 »
0
But their 1099 wont match your accounts then? Just asking as I am not US taxed, I dont know how it works in the US.

« Reply #19 on: February 08, 2015, 08:14 »
+16
It is so messy and illegal for EU contributor that I ask if they can put my portfolio offline until they fix those issues. If they can't do that, I think only solution is to close account.

« Reply #20 on: February 08, 2015, 08:39 »
+3
If they don't issue a 1099 it won't matter - you can report it how you want.  However, I think they are required to issue one for anyone making more than $500 and the US government might go after them if they don't.  I wouldn't want that if I were them.  If they can't deal with the tax laws properly they should shut down until they can.

« Reply #21 on: February 08, 2015, 16:14 »
0
If they don't issue a 1099 it won't matter - you can report it how you want.  However, I think they are required to issue one for anyone making more than $500 and the US government might go after them if they don't.  I wouldn't want that if I were them.  If they can't deal with the tax laws properly they should shut down until they can.

I thought non us based companies don't have to issue 1099.  Istock never had to until this year when they made Getty in US  their home base.  Envato says they are not currently issuing 1099s.

« Reply #22 on: February 08, 2015, 19:55 »
+2
But their 1099 wont match your accounts then? Just asking as I am not US taxed, I dont know how it works in the US.

None of the agencies based outside the US have ever issued me a 1099 - Dreamstime has a theoretical HQ in Tennessee even though Serban is in Romania, so I do get one from them because of their US presence.

For all the agencies that don't issue 1099s I have a spreadsheet with my calculation of the total royalties paid me in a year and I give that number to our CPA who prepares the taxes.

« Reply #23 on: February 08, 2015, 20:10 »
+2
I print out the notice of what they paid me and it is not a problem.

« Reply #24 on: February 09, 2015, 02:46 »
0
But their 1099 wont match your accounts then? Just asking as I am not US taxed, I dont know how it works in the US.

Not matching numbers is a trigger for auditing for IRS!
Did anyone talk to Envato on this matter?


 

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