How is tax withholding calculated?
We withhold the amount indicated on your tax form for each product you sell to a US buyer. Your sales page will show columns illustrating the breakdown of earnings and tax withholdings. Here's an example of how it works (please keep in mind that this may differ from your situation.)
The following Example Seller has a 15% withholding rate.
Sale 1 (Boxed in Red): Sale to a US customer
Indiana Jones purchases a $16 infographic. Here’s a breakdown:
- Price: The item's total price $16
- Taxes: 15% of $16 is $2.40 (0.15 x 16 = 2.40)
- Creative Market Commission of 30%: 30% of $16 is $4.80 (0.3 x 16 = 4.80)
- Taxes + CM Commission = $7.20
- Earnings: The seller earns $8.80 = $16 - (Taxes + CM Commission)
Sale 2 (boxed in blue): Sale to a non-US customer
Since this referred customer is outside of the US, there are no taxes withheld on that sale for this seller.
Q: Why is the tax withheld lower than the sales price?
A. If you notice that tax withheld is lower than the sale price that's because the buyer used a discount and the tax is based on the discounted amount.
Q: Why do you take taxes from the full sales price?
A: The law written in the agreement requires us to withhold from the original sales price. We must comply to the letter of the law, so the tax is calculated from the original sales price.
For more questions and answers on taxes please see our Tax FAQ for Foreign Shop Owners.
Disclaimer: Creative Market does not provide tax advice. For further information and to ensure you are complying with tax laws, please consult a tax professional.