Still getting US tax deducted after submitting UK tax treaty forms

3d illusions
3d illusions Posts: 44 traveler rank
in First-time course creation

Hi, I've just released my course, and although I've submitted the necessary tax form for UK tax treaty benefits, I still see the US tax amount of 19% deducted from my revenue.

Is this a Udemy error/delay in processing, or is some US tax deduction still expected even with the treaty? My understanding was that the treaty was in place to protect from double taxation. For example at the end of the year when I submit my accounts, I have to pay 20% UK income tax on any income I make from Udemy. This problem has never occurred with other US based sales portals I use to sell on, so hopefully it's just a delay in processing.

Cheers

Michael

Comments

  • 3d illusions
    3d illusions Posts: 44 traveler rank

    Oh wait, is the tax shown referring to VAT, and rather than the student paying it, the tutors get it deducted from their revenue?

    Is there any way for tutors to modify the deals program price so that customers purchase at the intended cost + their county's sales tax? Or perhaps a setting somewhere 'display price = deals price + TAX'? It would be nice not to be forced to pay the customers local sales tax, otherwise I'll be losing nearly half of the sale in tax (customers tax + my income tax).

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  • PhillipBurton
    PhillipBurton Posts: 405 visionary rank

    Hi 3d,

    Yes, the 19% looks like VAT or similar.

    If you had that setting, you would still be "losing nearly half the sale in tax". It would only be the appearance that would be different.

    In reality, the customer paid $5.99 + VAT. That VAT goes straight to the relevant government, and you have got around 94% of that.

    Phillip

  • 3d illusions
    3d illusions Posts: 44 traveler rank

    yep, I understand that, but usually it's the buyer that covers their own VAT, because they're the citizen of that country. My course's base price is £89.99, so having it lowered to £9.99 through the deals program is already a whopping reduction. It feels like a bit of a kick in the teeth that I'm expected to pay their VAT as well.

    The only way to avoid it seems to be to opt out of the deals program, which I guess might be detrimental to sales.

    Could you update your system so that they cover their own VAT, or have an option for the displayed price to be £9.99 (or whatever the deal price is) + VAT? So instead of them seeing the course as £9.99 it would be displayed as £12.49.

    That way, I'd receive closer to the £9.99, because the display price would have been 20% more.

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