Posts by Cocomero

197 posts
  • Has been part of the Envato Community for over 1 year
  • Sells items exclusively on Envato Market
Cocomero
says

It just feels like the same issues have been pointed out over and over again – Envato will be implemeting things by the book and they will have the best in the business assisting them. It’s tricky business.

1. Issues unanswered are still issues. They will not disappear in some magic way as our economic environment and law are not going to disappear as well.

2. These are not pointed over and over. @1stweb described things in a way that required explanation as he doesn’t understand changes which took place on TF since February.

3. I find your answer as offensive. Do you really think that such reactions as yours are ok? I agree with you that we should not ask anymore. However Envato should provide solutions ASAP as law is effective since 01.01.2015 and we have 24.02 right now. It’s two months.


Maybe spend the time uploading new themes now? New themes can take months to be approved.

Months? Are you joking?


While the themes are pending review you can then spend the time here on the forums?

Personally I have other sources of money and I’m not going to upload anything until Envato confirm their VAT responsibility in Author Terms. Forum posts and promises are not enough for any IRS.

197 posts
  • Has been part of the Envato Community for over 1 year
  • Sells items exclusively on Envato Market
Cocomero
says

Wouldn’t time be better spent creating themes?

Sure. And we do this.

However we do not design items for sale on TF for fun, but for money.

And this is a quite significant difference when your earnings can be ripped off by 23% VAT. Don’t you think?

It’s not our fault that EU officials complicated law and it’s not our fault that Envato cannot adapt to new law for 2 months.

So, you should not expect that this topic is going just to die silently.

197 posts
  • Has been part of the Envato Community for over 1 year
  • Sells items exclusively on Envato Market
Cocomero
says


Hi, I figured out almost everything due to the VAT changes the only thing that I need is VAT number on invoices. With b2b transactions (buyers from EU) I need to have my VAT EU ID and theirs visible on the invoice. I am not sure why it is not there? My accountant says without this it wont be possible to book the income.

If the buyer is from EU, then Envato steps in the supply chain (Author supplies to Envato, then Envato supplies to the Client). This will also be shown on the invoice (Collis posted a sample of how the invoice will look once Envato will start charging vat; it clearly states Envato as “Supplier for VAT purposes”). Since you as an author supply to Envato, you issue your invoices to Envato and keep them for your books.

So as long as the buyer is from EU (whether its a customer or business), it’s irrelevant to ask for the buyer vat id because you will not invoice the buyer directly.

Unfortunately you are wrong. You should take a look at sample invoice. You do not sell anything to Envato. So, this invoice is not issued by Envato to customer. It is issued by you as Author to customer and Envato is only mentioned as intermediary responsible for VAT. This is based on article 9a of 1042/2013 directive.

According to this directive when you sell directly to customer you should be responsible for VAT and intermediary portal is only acting on your behalf.

However you can point intermediary as responsible for VAT, as 9a says: “unless that provider is explicitly indicated as the supplier by that taxable person and that is reflected in the contractual arrangements between the parties”

This is why Envato provided sample invoice with Envato “explicitly indicated as supplier”. Problem is that local law in some countries (I know PL and GER) do not allow to issue such invoice. All Android developers have same problem as Google does exactly same thing.

197 posts
  • Has been part of the Envato Community for over 1 year
  • Sells items exclusively on Envato Market
Cocomero
says


Hi, I figured out almost everything due to the VAT changes the only thing that I need is VAT number on invoices. With b2b transactions (buyers from EU) I need to have my VAT EU ID and theirs visible on the invoice. I am not sure why it is not there? My accountant says without this it wont be possible to book the income.
I got a message from Envato that they are working to include this info, I am not sure why is it taking so long they just need to display two numbers from the settings panel…

ORLY? So, tell me how to issue invoice properly as invoice proposed by Envato is not compatible with polish law? KIP doesn’t know and cannot answer. Do you know more then these folks?

197 posts
  • Has been part of the Envato Community for over 1 year
  • Sells items exclusively on Envato Market
Cocomero
says

git :)

197 posts
  • Has been part of the Envato Community for over 1 year
  • Sells items exclusively on Envato Market
Cocomero
says

^ Same for polish.

197 posts
  • Has been part of the Envato Community for over 1 year
  • Sells items exclusively on Envato Market
Cocomero
says


(2) There won’t be VAT on the author fee because for EU VAT Purposes, Envato acts as a supplier in the middle. This means that for VAT purposes our invoice for an author fee is immaterial, because as far as the VAT is concerned the author supplied to Envato, and Envato supplied to the buyer.
Envato Glossary of Terms
Service Fee Invoice:
Every month authors will receive a single aggregated invoice for all Author Fees and SWIFT Fees paid to Envato during that period.


Author Fee:
When you make a sale on Envato Market, you are charged an Author Fee by Envato for use of our platform and services. The Author Fee rate we charge is dependent on whether you sell exclusively with Envato Market, and the volume of sales you’ve made. The volume is measured as the total list price of those items for all time.


Envato is providing an e-service platform right now and using the platform for a fee is buying e-services from Envato! So for non-business EU author’s without VAT ID the author fee must be taxed with EU VAT based on location of the author. In taxable manner, it’s the same as if EU consumers buy items from Envato.

Exactly.

This is why I answered to Collis that he is wrong. It’s also another problem for Authors who sell items as individuals.

It can also give us some crazy numbers! For example:

Author: NON-Exclusive individual from Poland VAT: 23% income tax: 18% or 32% when you reach about $23000/year. Let’s assume Author income is more than 23000/year so he has to pay 32% income tax:

Item price: $100

Buyer Fee: $20

Author gross income: $80

Author Fee: $44 + $10,12(VAT)

Income tax base: $80

Income tax 32%: $25,60

Money from Envato: $36

Net earnings: $36 – income tax $25,60 – vat on Author Fee $10,12 = $0,28 !!!!!!!!!!!!!!!!!!!!!!! :shocked: :crying:

You also have to pay some commision for currency conversion you can actually spend more money than you earn!

I know that most authors are exclusive, but I hope you can see where is the problem for individual Authors in most EU countries.

197 posts
  • Has been part of the Envato Community for over 1 year
  • Sells items exclusively on Envato Market
Cocomero
says

To answer the question about frameworks: If you want to use a 3rd Party framework thats fine as long as it has the right kind of licence that allows for commerial use.

Great!

But what about IE9 and WP Themes?

197 posts
  • Has been part of the Envato Community for over 1 year
  • Sells items exclusively on Envato Market
Cocomero
says


Thanks for the update. I hope there will be an XML export of all information from invoices including customer contact and company details. Bulk download of PDF documents won’t be any help. XML can be easily changed and imported directly into any decent accounting system.
Thanks ait, that’s an interesting suggestion and one I hadn’t thought of. Do you have any examples of import tools for accounting systems that you think this data would be used for. Would help a lot to see some examples to base any analysis we do on.

There is a huge amount of software vendors in EU providing software for accounting VAT, income tax, international sales, HR and other business procedures.

Lot of them use an Electronic Data Intercharge format called EDI described here.

Some vendors provide modules like this one. This module allows import/export of invoices and other business reports from various systems available on Polish market.

Some more info about XML invoices is also available here and here.

So there is no need to reinvent anything or develop from scratch. As Envato is now an EU taxpayer you probably could purchase and use some existing software used by EU companies.



1. You should be aware that deduction of fees is something that can be reported by business Authors only. AFAIK this is similar in most EU countries:

(this is not related to VAT! It’s related to income tax only)

Author = business: Item price $80 – author fee $30 = net income to report $50 Author = individual: item price $80 – useless piece of paper worth 0 = net income to report $80

Is this possible to create two different types of accounts on Envato for business authors and individual authors with slightly different model for invoices and fees?

2. Are you going to add VAT to Author Fee for non business Authors?

3. Could you please provide a list of EU Directives which are related to your new Author Terms 22 and 23? It could be much easier to talk with government authorities and IRS showing them “pure law”.

4. Is there any schedule/timetable/roadmap? When all these changes related to VAT are going to be fully functional on Envato Market? When are you going to issue VAT invoices to customers and charge VAT?

Hey Cocomero, thanks for the kind words – it’s actually been good for me being back in the forums – getting my forum post count up :-D Wish it wasn’t about tax though!

To your questions:

(1) I understand a few authors have said they will have problems as individuals selling. This really depends on your local country requirements. It’s best to talk to your accountant or tax advisor on the best way to sell with Envato.

At this time we’re working on a reseller model for authors who want to sell via Envato Bundles, that might help some authors. But at the moment, no plans to do so via Envato Market.

There is no problem with selling. Problem is that you cannot deduct cost as an individual. So, your tax base is going to be higher and net income from sales are going to be lower.


(2) There won’t be VAT on the author fee because for EU VAT Purposes, Envato acts as a supplier in the middle. This means that for VAT purposes our invoice for an author fee is immaterial, because as far as the VAT is concerned the author supplied to Envato, and Envato supplied to the buyer.

I’m afraid you are wrong. Author Fee is something we as Authors pay to Envato for your services.

So, Envato is the seller here. If Author is an individual living in EU then you should just add VAT unless Author has VAT ID.


(3) There’s a lot of information in the explanatory notes from the EU about Article 9a. You can find them here: http://ec.europa.eu/taxation_customs/resources/documents/taxation/vat/how_vat_works/telecom/explanatory_notes_2015_en.pdf in pages 22 onwards. It goes over lots of scenarios where a platform or app store could be deemed to be taking part in the supply and take on the VAT responsibility and invoicing.

Yes I know. However I’m still unsure which scenario is correct one. Polish KIP (tax information) says that your invoice format is currently impossible by polish law. They insist on Scenario 3 as the only valid one.

However this problem is also affecting all Android developers in Poland and other EU countries selling their apps/games on Google Play. So, this question about invoice with third party “explicitly indicated as the supplier by that taxable person” is now in Polish Ministry of Finance and answer should be announced soon.


(4) We have an internal timetable, but I’m not ready to release it because we’ve had a couple of delays already along the way. We’re working on it as a high priority though because the longer we’re not collecting EU VAT from buyers, the longer it is coming directly from Envato!

It could be nice to see this statement in Author Terms. Then I could show this to local IRS and start selling safely. Forum post is not enough for IRS.

197 posts
  • Has been part of the Envato Community for over 1 year
  • Sells items exclusively on Envato Market
Cocomero
says

Some as you said “obvious” things:

1. HTML is not valid.

2. CSS is not valid as well.

3. Blog masonry section is broken on IE9 (380px width).

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