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Author Topic: Envato want to be a reseller and makes the contributor to the seller!?  (Read 27821 times)

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« Reply #50 on: February 20, 2015, 06:21 »
+2

As a contributor to this "marketplace" I will not worry too much about this. These are people that walk like an agency and talk like an agency. They review the content, they brand it with their watermarks, they set the licenses as well as the prices, they process the payment, and so on and so on... Chances are, any judge and any tax authority will recognize them as an agency.

Of course you have to worry about. Envato course is ambiguous yes.
But what you tell the tax office which are not understood first?

Thats all just makes too much work and problems.

« Last Edit: February 20, 2015, 06:27 by R2D2 »


« Reply #51 on: February 20, 2015, 06:24 »
0
double post

« Reply #52 on: February 20, 2015, 07:27 »
+10
What the h... are you doing Envato? This type of invoice youve sent to the buyers are illegal where I live. But its not your problem right? You just wrote my name on the invoice and everything is OK for you? So thats the wrong way!

BTW: Why is my full name on the Invoice but only the first letter from the buyer?

« Reply #53 on: February 20, 2015, 10:07 »
+15
Been trying to get my head around this and I just can't seem to figure out how this can work. They're issuing invoices with my name on them, as if me and the buyer had some direct transaction. But then they're going to eventually issue 1099s saying that they paid me the full value of each sale, and then I paid them an author's fee for using their marketplace. It makes no sense. They want to claim the expense of paying me, but not claim that they're the actual seller of the product.

I can't even imagine how the IRS would make any sense of what they're trying to do.

IRS: "So you sell the products on behalf of contributors."
ENVATO: "No, we just set up the marketplace for people to sell their stuff."
IRS: "So you don't pay the contributors, the buyers do."
ENVATO: "No, we pay the contributors and issue 1099s for what we pay them."
IRS: "Then what's with the invoices from contributors to buyers?"
ENVATO: "That's so the buyers can pay the contributors."
IRS: "So the buyers do pay the contributors."
ENVATO: "No, we pay them."
IRS: "Uh...huh..."

On top of that they don't want to be an agency, but they do want to set prices, decide what content is up in the marketplace, and take an agency-size percentage of each sale.

In other words they want everything configured to work best for them and give them every advantage, and the contributor is out of luck when tax time comes around and needs to sort through this mess.

Having a really hard time finding any reason to stick with Envato at this point.
« Last Edit: February 20, 2015, 10:13 by EmberMike »

« Reply #54 on: February 20, 2015, 12:24 »
+8
I just sent Envato a support ticket asking them if they were planning to issue US 1099s for the 2015 tax year, and if so, were they planning to use the fictional earnings number on the invoices versus the actual amounts we get get paid. I noted that I'd have to leave PhotoDune if they were planning to do this as the tax hassle wasn't worth the income.

If they don't plan to issue 1099s, I can continue as I have been, reporting the income they actually pay me.

I understand that the odds of any court anywhere upholding this creative writing assignment they call an invoice are close to zero, but I have no interest in spending time or money litigating this nonsense.

« Reply #55 on: February 20, 2015, 13:30 »
+3

As a contributor to this "marketplace" I will not worry too much about this. These are people that walk like an agency and talk like an agency. They review the content, they brand it with their watermarks, they set the licenses as well as the prices, they process the payment, and so on and so on... Chances are, any judge and any tax authority will recognize them as an agency.

Of course you have to worry about. Envato course is ambiguous yes.
But what you tell the tax office which are not understood first?

Thats all just makes too much work and problems.

I don't think I do. Envato with their ridiculous, transparent antics doesn't declare my taxes to my European tax authority. They declare theirs, and good luck with that. I as a citizen of a European country declare my own taxes and I will declare what I receive from them on the date that I receive it like I do with any other agency. My tax authority will then tax me on that income. Done. My tax authority will neither know nor care what Envato is trying to pull off.

« Reply #56 on: February 20, 2015, 13:47 »
+5

As a contributor to this "marketplace" I will not worry too much about this. These are people that walk like an agency and talk like an agency. They review the content, they brand it with their watermarks, they set the licenses as well as the prices, they process the payment, and so on and so on... Chances are, any judge and any tax authority will recognize them as an agency.

Of course you have to worry about. Envato course is ambiguous yes.
But what you tell the tax office which are not understood first?

Thats all just makes too much work and problems.

I don't think I do. Envato with their ridiculous, transparent antics doesn't declare my taxes to my European tax authority. They declare theirs, and good luck with that. I as a citizen of a European country declare my own taxes and I will declare what I receive from them on the date that I receive it like I do with any other agency. My tax authority will then tax me on that income. Done. My tax authority will neither know nor care what Envato is trying to pull off.

of couse that works for the time being but least at a tax audit you will have to explain it...

« Reply #57 on: February 20, 2015, 13:59 »
+2

As a contributor to this "marketplace" I will not worry too much about this. These are people that walk like an agency and talk like an agency. They review the content, they brand it with their watermarks, they set the licenses as well as the prices, they process the payment, and so on and so on... Chances are, any judge and any tax authority will recognize them as an agency.

Of course you have to worry about. Envato course is ambiguous yes.
But what you tell the tax office which are not understood first?

Thats all just makes too much work and problems.

I don't think I do. Envato with their ridiculous, transparent antics doesn't declare my taxes to my European tax authority. They declare theirs, and good luck with that. I as a citizen of a European country declare my own taxes and I will declare what I receive from them on the date that I receive it like I do with any other agency. My tax authority will then tax me on that income. Done. My tax authority will neither know nor care what Envato is trying to pull off.

of couse that works for the time being but least at a tax audit you will have to explain it...

Why? I report my earnings correctly. I pay my income tax. I owe no sales tax on a sale made by the agency to a third party, and I owe no sales tax on what money I receive from the agency as a foreign entity. I am in the clear.

« Reply #58 on: February 20, 2015, 14:21 »
+1

[/quote]

Why? I report my earnings correctly. I pay my income tax. I owe no sales tax on a sale made by the agency to a third party, and I owe no sales tax on what money I receive from the agency as a foreign entity. I am in the clear.
[/quote]

yes we know that. But the tax office thinks perhaps as Envato. And then I do not want to explain why Envato is not a platform.

« Reply #59 on: February 20, 2015, 14:50 »
+11
I can only attach my paypal income to accounting, only real money what I can see on my account and they are my income for tax account. The Photodune's invoices and scam system are only pile of s..t for my bookkeeper. Of course someone makes a big big tax fraud and I hope it's the Photodune!

- Photodune can't issue my invoices
- invoices are totally wrong formed

Invoices must include:
- invoice number must be consecutively numbered, no missing numbers
- full customer name and address
- customer's VAT number
- author's VAT number
- amount without the VAT 0%
- amount of VAT and VAT % what ever it is in different EU country
- amount with the VAT -> this money will come to the bank account
- I must collect VAT for TAX office once a month

So, if I explain this The Photodune "system" for my bookkeeper and for the tax office they both laugh me out.. I think there is only one way for the EU contributors, say bye bye for the Photodune..

« Reply #60 on: February 20, 2015, 16:13 »
+2
I can only attach my paypal income to accounting, only real money what I can see on my account and they are my income for tax account. The Photodune's invoices and scam system are only pile of s..t for my bookkeeper. Of course someone makes a big big tax fraud and I hope it's the Photodune!

- Photodune can't issue my invoices
- invoices are totally wrong formed

Invoices must include:
- invoice number must be consecutively numbered, no missing numbers
- full customer name and address
- customer's VAT number
- author's VAT number
- amount without the VAT 0%
- amount of VAT and VAT % what ever it is in different EU country
- amount with the VAT -> this money will come to the bank account
- I must collect VAT for TAX office once a month

So, if I explain this The Photodune "system" for my bookkeeper and for the tax office they both laugh me out.. I think there is only one way for the EU contributors, say bye bye for the Photodune..

I agree with everything but the last sentence. Not that I am vastly opposed to kicking PD to the curb, I just don't think you have to because of tax issues. Everybody here assumes the tax authority knows or cares to know about what Envato thinks they are today -- agent, marketplace, wizard... whatever. I assure you, the tax authority doesn't give a ****. So unless you go to them and explain Envato's craziness, this will never become an issue. Tax authorities don't expect 100% kosher invoices from foreign entities, so they will be fine with the Paypal remittance if they need even that. And you declare that as income. Done.

All this may not be true if you are a giant corporation and make tens of thousands on Envato, of course. But then again, who but maybe the most successful web template designers are?

I don't really wanna keep doing this because it seems like I am defending Envato, which I am not. I am just telling you, as someone who knows the theory and the practice of law and who has a pretty good understanding of bookkeeping and accounting standards for small businesses: this is being blown out of proportion. It won't be an issue.
« Last Edit: February 20, 2015, 17:35 by MarcvsTvllivs »

No Free Lunch

« Reply #61 on: February 20, 2015, 16:19 »
+3
give us 100% commission rate and we will proudly pay taxes on that 100% commission! 8)



Tror

« Reply #62 on: February 21, 2015, 10:03 »
+8
I can only attach my paypal income to accounting, only real money what I can see on my account and they are my income for tax account. The Photodune's invoices and scam system are only pile of s..t for my bookkeeper. Of course someone makes a big big tax fraud and I hope it's the Photodune!

- Photodune can't issue my invoices
- invoices are totally wrong formed

Invoices must include:
- invoice number must be consecutively numbered, no missing numbers
- full customer name and address
- customer's VAT number
- author's VAT number
- amount without the VAT 0%
- amount of VAT and VAT % what ever it is in different EU country
- amount with the VAT -> this money will come to the bank account
- I must collect VAT for TAX office once a month

So, if I explain this The Photodune "system" for my bookkeeper and for the tax office they both laugh me out.. I think there is only one way for the EU contributors, say bye bye for the Photodune..

I fully agree.

My accountant told me that under _local_ law their invoices and connected actions as well as their "business model" would be highly illegal and subject to investigations of the (tax) authorities. There are laws against tax evasion, evasion of book keeping requirements, evasion of responsibilities towards customers and connected consumer protection laws etc. I will not mention the stronger assumptions he mentioned in very clear words. But obviously this affects only my local situation and will not have impact on Envato itself, although they might get "blacklisted" locally.

He recommended me to quit any relationship with them and/or file a official complaint against their business practices in order to protect myself.

« Last Edit: February 21, 2015, 10:12 by Tror »

« Reply #63 on: February 21, 2015, 14:21 »
+14
I received a reply from Envato support this morning (asking about whether 1099s would be issued for 2015 tax year to US residents, and if the fictional income - royalty plus author fee - would be listed on it). It pointed me to this blog post from October

http://marketblog.envato.com/news/us-authors-tax/

At the end of the post it says:

"16. What is reported on the 1099?
The income of the US Person is reported on the 1099.

When you sell items on Envato Market as an author, you are making a transaction directly with every buyer who purchases your item. Your income is the gross value of this sale to the buyer. In an immediate follow-on transaction, Envato charges authors an Author Fee which is an expense against your income.

Our fee structure changed on September 1st, 2014 to reflect our services to buyers. Buyers now purchase both an item, and pay a Buyer Fee to Envato. Author income is only the portion of the sale which is for the item (i.e. not the separate Buyer Fee transaction). Again, Envato charges authors an Author Fee against that income.

The Statements page is being updated to provide authors with all the information they need to complete their tax return."


So I think I need to wind up my dealings with Envato; now the only question is if they will pay me the balance owed (which is currently under $50) if I quit today. If not I'll have to hit $50 and then remove images, get paid a month later and then close my account.

It's a shame, but they're such a low earner, they're not worth the hassle.

« Reply #64 on: February 21, 2015, 14:42 »
+12
It's a shame, but they're such a low earner, they're not worth the hassle.

Thanks for sharing this info, Jo Ann.

I'm going to leave Envato, too. "No pain, no gain" doesn't work in this case. More like "All pain, little gain."

So adis, Envato! Looks like you're dead set on driving your business into the ground.

« Reply #65 on: February 21, 2015, 15:22 »
+2
Wow. So, I'm no tax expert, but this to me means that anyone from EU that has an account with Envato shoud either deactivate their account, or report (and pay) taxes on the income that he/she did not make, losing quite a large chunk of money?

« Reply #66 on: February 21, 2015, 15:59 »
0
Could somebody from Europe please explain these changes to me like I'm a five year old?

As far as I know I would personally have to collect and pay VAT from every EU customer if I'm the seller. But apparently Envato is going to do it for me? Is that really legal?

No Free Lunch

« Reply #67 on: February 21, 2015, 20:04 »
+12
When a company makes a stupid decision like this I often wonder which type of drugs they take to alter their minds   :-[


« Reply #68 on: February 22, 2015, 01:49 »
0
I have a few templates marked to purchase on Graphic River, guess I better decide which ones I need the most and buy before everyone pulls their products!  I can't find the InDesign ones anywhere else.

« Reply #69 on: February 22, 2015, 05:52 »
+3
I think I will give them until the end of the month, surely they are going to have to fix this or they might as well close now?  Can't quite believe they are so slow reacting to this, a great way to lose buyers, as they are going to be looking for missing images on other sites now.

« Reply #70 on: February 22, 2015, 09:09 »
+2
I got a reply back to my request to close my account and was told that my message had been forwarded "to the necessary staff for consideration." And maybe I'm reading too much into it but to me, "for consideration" might suggest that they could be reconsidering the implications of this new policy, particularly if contributors are requesting to close their accounts because of it.

So anyone considering closing their account, I'd suggest contacting Envato to let them know that you're even thinking about it. Maybe if enough people express an interest in parting ways with them, they might fix this mess.

« Reply #71 on: February 22, 2015, 09:27 »
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.

I don't get 1099'd by Envanto.

« Reply #72 on: February 22, 2015, 09:40 »
+2
I got a reply back to my request to close my account and was told that my message had been forwarded "to the necessary staff for consideration." And maybe I'm reading too much into it but to me, "for consideration" might suggest that they could be reconsidering the implications of this new policy, particularly if contributors are requesting to close their accounts because of it.

So anyone considering closing their account, I'd suggest contacting Envato to let them know that you're even thinking about it. Maybe if enough people express an interest in parting ways with them, they might fix this mess.

I did that too, Mike, last night. Here's the response that greeted me this Sunday morning:

Hi Martha

Thanks for getting in touch. I'm Scott an Envato Help Officer and I will be helping you today.

I understand your concerns with our recent changes and will escalate your ticket to the appropriate person to assist you with this.

Thanks for your patience and we will be in touch very soon :)

All the best!

Scott
Envato Help Officer
Mon-Fri 0800 - 1600 GMT


At least Scott acknowledges that their recent changes are a problem. We'll see where it goes from here.

« Reply #73 on: February 22, 2015, 12:04 »
+4
I am not quite sure that I understand tax implications for US contribution.
Assuming that Envato sends to IRS information on total sales, I see 3 scenarios:

1. I am claiming "author fee" as expenses, but Envato total sales as income pushes my taxable income up, potentially increasing my taxes and practically lowers my commission from Envato.

2. I am claiming net payment from Envato as my income. It puts me into potential troubles with IRS. Unless, I am reporting more income than it is covered by all these forms sent to IRS. It may be not a case any more if IS starts reporting to IRS.

3. I hate Envato and delete my account, but I am getting 2% of my total microstock income from them which is significant number in my budget.

« Reply #74 on: February 22, 2015, 13:08 »
+3
3. I hate Envato and delete my account, but I am getting 2% of my total microstock income from them which is significant number in my budget.

If your earnings from Envato are a significant part of your income, you should stay there and work through the tax implications.

For people like me, however, who get very little back from my time invested in Envato over the last few years, this just doesn't seem to be worth the hassle.

As always, YMMV.


 

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