Posts by SurStudio

233 posts
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  • Has sold $40,000+ on Envato Market
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SurStudio says

Great post. Can you ask what would happen if a foreign company doesn’t pay EU VAT? Like is there any punishment of some sort? Thanks!

Edit: Also, shouldn’t it be considered the place of enjoyment instead of the location of the buyer. For ThemeForest and CodeCanyon, the Items are going to be hosted somewhere. Shouldn’t be the location of the server where the Item is hosted taken into consideration for VAT purposes? And not the buyers location?

233 posts
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SurStudio says

Here’s some more explanations: link

It says:

In some cases, subject to a ‘use and enjoyment’ override

Seems like it should be considered the place of ‘use and enjoyment’. In the specific case of ThemeForest and CodeCanyon, should be where’s the server hosting the Items, and not what’s the buyers location.

233 posts
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SurStudio says

Can this country of residence be changed, say, six months from now?

After confirming my country I got this message:

Thanks for confirming your country! You can change your country details at any time via your settings page.

233 posts
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  • Has sold $40,000+ on Envato Market
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SurStudio says

@Surstudio, I really hope this doesn’t across as rude, but I don’t see the relevance in any of that to this conversation. If some buyers go to such extreme extents to break the law to avoid paying a tax they should be paying (i.e. VAT on goods they buy), what do you want Envato to do? Envato will be complying with VAT law from 1st January by collecting VAT from people they know are EU buyers and then passing it on to the relevant authorities following VAT compliance guidelines. And now that we have the future of VAT compliance on Envato established, we have shifted the attention to get Envato to clarify in crystal-clear terms, who the real seller is and to discuss past sales, as that has a huge impact on past declarations of income tax and VAT. If you read the hundreds of comments in this thread, you can read on why this is so important/relevant and is what most authors are waiting Envato to talk about next.

No worries, we’re just talking here. It’s true that some people get a bit touchy sometimes.

That was a part of another bigger message, look up on the previous page. Anyway, I don’t expect Envato to do anything. The comment was meant to reveal the flaws of a law made by people with little to none knowledge about the Internet.

To me, the terms are crystal-clear already. As you said, here the discussion seems to be who’s the real seller etc… I don’t think that really matters, is a topic that leads to disagreements and rage.

Envato is going to collect VAT on EU buyers, and authors will still receive their payments as always. Neither Envato or authors will pay VAT on previous years. EU authorities can’t force EU authors to pay these taxes because those authors simply don’t have the required information. Envato won’t be paying those taxes either as they will go bankrupt.

If I were a EU author, I’ll setup an offshore company for 1000 USD/year, take my money out of the EU, and live with less stress.

233 posts
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SurStudio says



@ senorthemes — That doesn’t matter anymore. The new EU law taking effect on January 1, 2015 changes the tax zone to the place of supply not the seller’s location.
True, but I wonder how long will it take for EU buyers to realize they can use a VPN software/service to fake their location to not pay tax. It’s really simple actually.

That won’t work under the EU law. Sellers are required to validate and store two pieces of information to determine where a buyer lives. Under the (stupid non-realistic) law you cannot simply take the user’s word and IP address as truth.

See section “THE FUTURE CHECKOUT USER EXPERIENCE” here: http://rachelandrew.co.uk/archives/2014/11/30/how-the-eu-vat-rules-make-eu-startups-and-digital-businesses-uncompetitive-in-a-global-market/

If a buyer uses a VPN in lets say, Singapore, and provides an address from Singapore, and has a PayPal account in Singapore, that’s pretty much it. Besides, Envato won’t ask their buyers for their addresses before they make a purchase, they will use the address from the payment gateway; or who knows, maybe they will just use the IP address of the buyer to get its location.

EU buyers will do this, because it’ll affect all their online electronic/software transactions. It’s not to save 10 USD on a theme. It’s to save hundreds or thousands in the long run.

The law and all its requirements are one thing, real scenario is totally different.

233 posts
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SurStudio says

@ senorthemes — That doesn’t matter anymore. The new EU law taking effect on January 1, 2015 changes the tax zone to the place of supply not the seller’s location.

True, but I wonder how long will it take for EU buyers to realize they can use a VPN software/service to fake their location to not pay tax. It’s really simple actually.

Also, many authors are expecting Envato to pay those past years of taxes. That won’t happen, if authors earning 50%-70% can’t afford to pay, lets say 20% (average EU tax) of previous years earnings; how come Envato earning 30%-50% could? Plus, Envato has to pay the fees for the transactions, and to cover all the operational costs etc…

Seems like there’s a lot of information on the internet about this new tax scheme. However, it doesn’t say what the EU would do if foreign companies don’t comply. I mean, what could they do anyway?! You can’t just legislate for foreign territories.

233 posts
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SurStudio says


Is there a link or something where we can read about this? Because all I find on the internet is an author has to pay VAT in his/her own country.
So it’s up now, but the regulation will change on 1 January 2015 for EU citizen
More information for EU citizen:
http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/telecom/index_en.htm

Thank you! But seems like these changes are for Telecommunications, broadcasting & electronic services only. We don’t buy/sell telecommunications; we don’t broadcast; and we certainly don’t buy/sell any electronic service. I don’t see how this marketplace is under any of these categories.

Anyway, so a EU citizen travels abroad and gets a cellphone. The telecommunications company will be charging VAT to this person, and sending those payments back to the EU? So people abroad will have to bring their passports if they want to buy something at a 7-eleven, or to a computer store. If a person wants to get some software abroad, then he/she will have to prove is not a EU citizen, otherwise will have to pay VAT. Like… really?

How come the EU can regulate how businesses work in foreign territories?! This whole thing seems to be ridiculous.

233 posts
  • Made it to the Authors' Hall of Fame
  • Has been part of the Envato Community for over 3 years
  • Has sold $40,000+ on Envato Market
  • Helped several times protecting Envato Market against copyright violations
+4 more
SurStudio says

As said by Envato: VAT will be added for all EU buyers

Is there a link or something where we can read about this? Because all I find on the internet is an author has to pay VAT in his/her own country.

If an european citizen travels outside the EU, and buys things and services; like get a hotel room or have lunch; does this person have to pay VAT to that hotel and restaurant? And then, do these businesses have to send the collected VAT to some EU agency?

233 posts
  • Made it to the Authors' Hall of Fame
  • Has been part of the Envato Community for over 3 years
  • Has sold $40,000+ on Envato Market
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+4 more
SurStudio says

You’re better off posting your question here.

Cheers

233 posts
  • Made it to the Authors' Hall of Fame
  • Has been part of the Envato Community for over 3 years
  • Has sold $40,000+ on Envato Market
  • Helped several times protecting Envato Market against copyright violations
+4 more
SurStudio says

@Dream-Theme Perhaps the biggest concern is to provide support on Envato’s terms and prices. Currently we have this opt-in vs opt-out approach. I think we need something more like:

  1. Opt in (Envato’s terms and prices)
  2. Opt in (Author’s terms and prices)
  3. Opt out

1. & 2. Should receive the same or similar visual advertisement, as the main thing here is to provide support, not who’s getting the money. This also would give room to Envato to come out with a nice support platform for Authors to opt in.

Just a thought.

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