Posts by DanyDuchaine

209 posts
  • Located in Canada
  • Elite Author: Sold more than $75,000 on Envato Market
  • Has sold $500,000+ on Envato Market
  • Made it to the Authors' Hall of Fame
+5 more
DanyDuchaine says

tax rules are so fun, I would definitely get confirmation from an accountant

Yeah, like I said my accountant doesn’t know. I’ll let the government find out what I should do.

209 posts
  • Located in Canada
  • Elite Author: Sold more than $75,000 on Envato Market
  • Has sold $500,000+ on Envato Market
  • Made it to the Authors' Hall of Fame
+5 more
DanyDuchaine says

the fact is that you are not selling anything, technically you are “collaborating” with envato and you get a compensation for your “collaboration”. don’t know if I was clear.

Yup, that’s why it’s so confusing.

209 posts
  • Located in Canada
  • Elite Author: Sold more than $75,000 on Envato Market
  • Has sold $500,000+ on Envato Market
  • Made it to the Authors' Hall of Fame
+5 more
DanyDuchaine says

If your income is over X limit (not sure what it is in Canada) then you would be liable to charge VAT on services you do.

Envato are basically paying your invoice (little more complicated than that but it’s a generic gist of it) so you would be liable to pay VAT on the amount received from Envato e.g.

In the UK our VAT rate is 20%, so for every £100 I earn, I need to put £20 aside for VAT. I charge this to the client so my charge for £100 job would be £100 + VAT which is £120.

In envato’s case, you can’t ask them to pay X+VAT, they pay you what you have earnt so say you earn $1000, you would keep $800 and put $200 aside for tax.

In VAT stuff, I would get an accountant to advise on this as if you do it wrong, you can land yourself a hefty bill. The accountant will be able to advise on the best way to deal with VAT and how to reduce it (legally) e.g. in the UK, we can sign up for a 12% tax rate if we don’t claim back VAT (great if you don’t do a lot of purchases).

Thanks Gareth, I understand you pay VAT when you do client work but what would you do if you would sell themes here?

Even my accountant doesn’t know.

209 posts
  • Located in Canada
  • Elite Author: Sold more than $75,000 on Envato Market
  • Has sold $500,000+ on Envato Market
  • Made it to the Authors' Hall of Fame
+5 more
DanyDuchaine says


Yeah well I think it’s a mess everywhere, it took 4 different people when I called my government to finally being told that they will make some research and call me later today.

Tell me, i spent once then 2 weeks calling and meeting people, the funny thing is one of them told me “why are you going to pay if this is almost invisible money for Spanish tax office?”. Actually he was working for the spanish tax office.

Spain, what a pain. :)

Haha yeah they don’t understand why we want to be legit lol.

When I called this morning, it was a really angry old woman and she told me : You are a new business, you don’t have to pay taxes until you do 30,000 … call us if you succeed to do that one day ..

I told her .. Sorry Ma’am .. I did this after 1 and a half month.

She transfered me to her superior lol

They seem to have a lot of trouble understand what we do here haha

209 posts
  • Located in Canada
  • Elite Author: Sold more than $75,000 on Envato Market
  • Has sold $500,000+ on Envato Market
  • Made it to the Authors' Hall of Fame
+5 more
DanyDuchaine says

Same here, no VAT needed on all the accounting. Just taxes being paid for the monthly (quarterly in my case) income. Trying to organise the whole thing here was a mess for me, as Spanish financial law doesn’t consider these kind of commercial movements.

Yeah well I think it’s a mess everywhere, it took 4 different people when I called my government to finally being told that they will make some research and call me later today.

209 posts
  • Located in Canada
  • Elite Author: Sold more than $75,000 on Envato Market
  • Has sold $500,000+ on Envato Market
  • Made it to the Authors' Hall of Fame
+5 more
DanyDuchaine says

I think you’re being a little too honest ;) all the Canadian government is going to see is some dollars coming in from overseas from one company so will look like a monthly comission payment… if it was multiple companies, or customers then they might look into whether you’re paying VAT for selling goods online.

In this world nothing can be said to be certain, except death and taxes. - Benjamin Franklin

:)

209 posts
  • Located in Canada
  • Elite Author: Sold more than $75,000 on Envato Market
  • Has sold $500,000+ on Envato Market
  • Made it to the Authors' Hall of Fame
+5 more
DanyDuchaine says

I have a business registered in the Netherlands and since Envato is located in Australia ( out of EU ) and Envato sells the themes to the buyers you don’t have to pay any VAT taxes

You do however have to collect your monthly statements and pay your income taxes on the income received from Envato as any business should.

My accountant verified this, but of course Canadian TAX laws could be different.

Yup exactly, that make sense.

Of course I am paying taxes on income but like you said since Envato isn’t based in our country, we probably don’t have to pay VAT.

209 posts
  • Located in Canada
  • Elite Author: Sold more than $75,000 on Envato Market
  • Has sold $500,000+ on Envato Market
  • Made it to the Authors' Hall of Fame
+5 more
DanyDuchaine says

Well Envato is in Australia… they sell your product to a customer and take a share, and then Envato pays Australian government tax on that income… then Envato pays you your commission which is INCOME for you and has nothing to do with VAT…. the customer pays VAT to Envato.. and you are in Canada, therefore you are receiving income which is taxable. If you are unsure about how much tax you should be paying, then ask an accountant… but there are various things you can do to bring down your tax if you declare all your business expenses properly.

Taxes on income isn’t a problem, in Canada it’s 20% for business (after expenses) .. so suppose I make 200K this year, and I pay 30K in expenses + 50K for my salary, I will pay taxes on 50K as an employee and my company will pay 20% on 120K ..

But it make sense that Envato charge taxes on the products and give it to Australia, that’s what I want to be sure of.

The thing is, I want to be sure my government won’t come see me in 10 years and tell me : you sold some products, you should have send us taxes on these products (which is different than taxes on the income) ..

209 posts
  • Located in Canada
  • Elite Author: Sold more than $75,000 on Envato Market
  • Has sold $500,000+ on Envato Market
  • Made it to the Authors' Hall of Fame
+5 more
DanyDuchaine says

Your badge shows that you have sold between 100,000 – 250, 000, you never have paid any tax before?

As a Freelancer, I was paying taxes on my incomes, not product. Now that I have a company, it’s different.

209 posts
  • Located in Canada
  • Elite Author: Sold more than $75,000 on Envato Market
  • Has sold $500,000+ on Envato Market
  • Made it to the Authors' Hall of Fame
+5 more
DanyDuchaine says

Hi guys,

These days I am in the process of opening the business bank account for my new company and while I am doing this, my government have a hard time figuring our if my products are “taxable” and if they are, if Envato took a tax from the user who bought my themes, and if they did, if they send it to my government on my behalf, phew.

It’s really confusing and I wanted to know if anyone here have their own company and if they send taxes.

I want to be clear, my company have to pay taxes on all of the incomes every year. Just not sure about the 5-9% taken on the products.

Thanks!

by
by
by
by
by
by