I migrated to AUS a few months ago and i did my first earnings withdrawal (yay), checking the box “Australian resident for tax purposes”.
As the end of the year approaches, i am trying to get organised with my GST and other incredibly exciting stuff.. and i suddenly wondered: what happens with GST on earnings from Envato. Is the GST taken off the net withdrawal amount, or is this money withdrawn already GSTaxed?
I did a search on the knowledge base but couldn’t find anything. Can a friendly Australian author enlighten me on the topic?
Thanks in advance!
Hey Simon! Are you still wondering about this? I know its been a couple of years since the original post but I’ve recently figured this out myself after much headache. (I am also an Australian author.) Sadly it is not as simple as applying a single GST equation to your withdrawal.
After a fair bit of back and forthing with Envato about this, the way I’ve been doing it as advised by my accountant is to do up a spreadsheet of every purchase included in a single withdrawal. Easiest way to do this is to only withdraw monthly or quarterly. (you can start from the invoice spreadsheet Envato give you which thankfully now has buyer country information.)
Every time you make a sale:
1. Envato invoices you, the seller. This fee includes GST (ie you can claim back your gst from Australian Tax Office – ATO) because it is two Aus entities.
2. You invoice the buyer. If the buyer is from Australia, it is as if the fee you charged was a little lower than it should have been, but you have charged GST from them, meaning you have to pay the GST portion of it back to the ATO. While this sucks and the seller takes a financial hit, as far as I know Envato doesn’t raise the fee 10% when an Aus seller is dealing with an Aus buyer to allow for the seller to account for the GST component. If the buyer is from overseas, it is simple, there is no GST included in this part of the transaction.
So, after the massive task of figuring out which sales were from Australia, you should be able to figure out your GST owing and GST payable in US dollars. Then, after withdrawing the money and transferring it to your bank account, you can use the exchange rate Paypal used to convert these GST figures into AUD, so that you know what you can claim/owe the ATO.
If there’s any other Aus authors who have experience with this, or I’ve missed anything and anyone from Envato would care to chip in here, I’d love a second opinion! Good luck!
Wow, thanks for that NoiseWorld, what a great concise explanation!
Still not sure i completely get it – seems like a massive headache for peanut earnings in my case.
Thanks again for the tips – I will definitely use this information in the next chat with my accountant.
Also, i can’t believe it’s been two years since i have posted this – time is flyyyyyying!