DAC7, why do they let sellers know just now!?

[leomusicdesign]

I'm a pro seller and I just got the communication about DAC7, which affects tax reporting of year 2023,

I'm really disappointed at Fiverr and the fact that they let us know just now, after the year has ended, instead of warning at the beginning of the year, explaining exactly what will they report to tax authorities. This matter has not been well-regulated until now, and I'm sure that there are a lot of seller (and their accountant) that don't even know how to declare these incomes exactly. Whether it's required to report after every sale, every month, every quarter, or annually.

I checked the emails from Fiverr during the past year, not a clue about DAC7.

So now, not only do they charge the highest commissions in the market (20%, the double of any other marketplace as far as I know, like Upwork etc.) but they expose us to risks of sanctions with no warning. Between exchange rates, their commission, taxes, unexpected events like this, working here is becoming quite pointless, you may end up with less than 50% of what seller pay!

To be honest I fell treated like a milking cow and nothing like a valuable asset.

Am I the only one who thinks this? come on community speak up!

 

[Alex.M]

8 hours ago, leomusicdesign said:

So now, not only do they charge the highest commissions in the market (20%, the double of any other marketplace as far as I know, like Upwork etc.) but they expose us to risks of sanctions with no warning. Between exchange rates, their commission, taxes, unexpected events like this, working here is becoming quite pointless, you may end up with less than 50% of what seller pay!

I completely agree with this , 20% Fiverr Taxes and around 46% other taxes ... so from a 100$ order I am left with less than 42$ after paypal taxes,conversion taxes ( USD to euro  and so on ) Not to mention that I have no idea how to proceed 

[alinaserv]

10 hours ago, leomusicdesign said:

I'm a pro seller and I just got the communication about DAC7, which affects tax reporting of year 2023,

I'm really disappointed at Fiverr and the fact that they let us know just now, after the year has ended, instead of warning at the beginning of the year, explaining exactly what will they report to tax authorities. This matter has not been well-regulated until now, and I'm sure that there are a lot of seller (and their accountant) that don't even know how to declare these incomes exactly. Whether it's required to report after every sale, every month, every quarter, or annually.

I checked the emails from Fiverr during the past year, not a clue about DAC7.

So now, not only do they charge the highest commissions in the market (20%, the double of any other marketplace as far as I know, like Upwork etc.) but they expose us to risks of sanctions with no warning. Between exchange rates, their commission, taxes, unexpected events like this, working here is becoming quite pointless, you may end up with less than 50% of what seller pay!

To be honest I fell treated like a milking cow and nothing like a valuable asset.

Am I the only one who thinks this? come on community speak up!

 

Where have you read that 2023 will be reported?...I can't find.

[Alex.M]

@alinaserv he is right , I also saw the same thing  [ https://www.avocatnet.ro/articol_65395/Declarația-pentru-raportarea-DAC7-oficializată-Prin-acest-document-ANAF-va-afla-despre-vanzările-făcute-de-contribuabili-prin-marketplace-uri.html ] 

[deesajn]

On 1/13/2024 at 7:58 PM, alinaserv said:

Where have you read that 2023 will be reported?...I can't find.

 

Not 2023, but this year. And they will report in the January 2025:

 

[Alex.M]

34 minutes ago, deesajn said:

 

Not 2023, but this year. And they will report in the January 2025:

 

 

where is this information from exactly? It would be great if this is the actual case... well not great but better 

[deesajn]

33 minutes ago, Alex.M said:

where is this information from exactly? It would be great if this is the actual case... well not great but better 

I have asked Customer Support, and this is what they wrote. I have also found the same information in a similar post on Reddit. Please check: 

 

[Alex.M]

Alright , I am curious to find out more... Anyway in all cases it's kinda bad. Fiverr takes 20% ... taxes are very high, around 46% in my country so from a 100$ order you actually are left with 34$ ....

[deesajn]

16 minutes ago, Alex.M said:

Alright , I am curious to find out more... Anyway in all cases it's kinda bad. Fiverr takes 20% ... taxes are very high, around 46% in my country so from a 100$ order you actually are left with 34$ ....

Correct, it is terrible! But a couple of years ago, I encouraged other sellers: DO NOT WAIT, create your website sell there and at least diversify your earnings, and in case Fiverr increases the fee (or something else happens, like DAC7), you will be independent. 

Fiverr is good at first, but if you stay here forever, you are trapped: Fees and extremely high competition. It's a trap!

[Alex.M]

I don't mind paying taxes, we all do one way or another but c'mon a total of 66% is not normal by any means 

[donnovan86]

34 minutes ago, deesajn said:

DO NOT WAIT, create your website sell there and at least diversify your earnings, and in case Fiverr increases the fee (or something else happens, like DAC7), you will be independent. 

Even if you sell services via your website, you have to complete that form. 

[donnovan86]

1 hour ago, Alex.M said:

well not great but better 

Well it shouldn't matter at all. Everyone needs to pay taxes to their income. The only people that will complain about this form are those trying to dodge taxes. I don't see the issue, US sellers have the W-9, so it was expected that eventually the EU will have something similar as well. And most likely Asian sellers too, I am not sure if they already do, but that will be coming soon most likely.

[Alex.M]

24 minutes ago, donnovan86 said:

Well it shouldn't matter at all. Everyone needs to pay taxes to their income. The only people that will complain about this form are those trying to dodge taxes.

Most people that will not complain are those who are not making money at all but your statement is correct, that's what people should write on the forum. 

[donnovan86]

10 minutes ago, Alex.M said:

Most people that will not complain are those who are not making money at all but your statement is correct, that's what people should write on the forum. 

I see no reason to complain man, if you already pay your taxes. I can only assume anyone complaining either partially pays their taxes or they fully dodge taxes. If that's the case for some, it was expected things would come to an end. As I said, US people already fill out their W-9 and Fiverr reports directly so it was expected they will do this for EU too, in order to comply with international regulations. 

I am curious if those sellers will increase their prices. 

[deesajn]

1 hour ago, donnovan86 said:

Even if you sell services via your website, you have to complete that form. 

Again, the trees. You won't have to pay Fiverr's 20% fee, and there will be less competition because the market is more diffused.

[donnovan86]

Just now, deesajn said:

and there will be less competition because the market is more diffused.

I mean... you're competing with the entire world and not just a single platform, so there are way more competitors. Also, you have to pay for advertising and that can be way more than 20% of your earnings in some cases. But I do agree, having an online presence and multiple streams of income is always beneficial.

[deesajn]

Just now, donnovan86 said:

I mean... you're competing with the entire world and not just a single platform, so there are way more competitors. Also, you have to pay for advertising and that can be way more than 20% of your earnings in some cases. But I do agree, having an online presence and multiple streams of income is always beneficial.

IMO, focusing on developing a global personal brand and building your independent empire beyond the confines of closed systems with stringent anti-seller policies is more advantageous. Additionally, advertising on Fiverr is necessary to rival sellers from regions with lower prices, which is far from a negligible cost. On my website, I compete with Fiverr and artists of vastly different styles. Utilising Google Ads simplifies the process of surpassing both Fiverr and these artists. The current 20% fee Fiverr charges is merely the starting point and will likely increase to 25% soon. 

[donnovan86]

8 minutes ago, deesajn said:

The current 20% fee Fiverr charges is merely the starting point and will likely increase to 25% soon. 

It's been like this for years man. It might change, I am not going to argue, but seeing that other platforms lowered charges, I think Fiverr will find additional ways to acquire $$ from sellers, like promoted gigs or seller plus. They might also force people one way or another to increase prices, which leads to more revenue for them. But we will have to wait and see. 

[deesajn]

True, we will have to wait and see.

[hawaiikristijan]

On 1/13/2024 at 6:11 PM, Alex.M said:

I completely agree with this , 20% Fiverr Taxes and around 46% other taxes ... so from a 100$ order I am left with less than 42$ after paypal taxes,conversion taxes ( USD to euro  and so on ) Not to mention that I have no idea how to proceed 

I think there should/is a minimum threshold under which you don't pay any taxes. For example, if you earn $8,000 for the entire year, you won't pay any taxes. Or if you earn $30,000 you won't exactly pay the maximum tax of 46%, but let's say a lower one of 30%. I'm not sure though.

[deesajn]

9 hours ago, hawaiikristijan said:

I think there should/is a minimum threshold under which you don't pay any taxes. For example, if you earn $8,000 for the entire year, you won't pay any taxes. Or if you earn $30,000 you won't exactly pay the maximum tax of 46%, but let's say a lower one of 30%. I'm not sure though.

In some countries, there probably is. I remember when I was in the UK for a couple of years, there was an excellent climate for small or micro-company creation, with relatively low taxes for beginners and a low social charge (something like medical care and pension monthly charge). When you open a one-person company, social and health insurance contributions are incredibly high in my country. It does not matter whether you have earned anything or not; you need to pay around $500 in fixed and unchanging fees, plus taxes. It's a horrible country for a freelancer or micro-company.

[donnovan86]

10 hours ago, hawaiikristijan said:

I think there should/is a minimum threshold under which you don't pay any taxes.

Lower taxes for some categories sure, but no taxes? Not going to happen. The tax man wants money, whatever you earn, they are entitled to get a cut from you. It is what it is man. 

[rawque_gulia]

On 1/20/2024 at 6:04 AM, hawaiikristijan said:

I think there should/is a minimum threshold under which you don't pay any taxes.

16 hours ago, donnovan86 said:

Lower taxes for some categories sure, but no taxes? Not going to happen.

Just sharing knowledge:- We have this here in India (and many other Asian countries too). Up to $6000, you won't have to pay any taxes, and up to $9000 is also tax free (but with a process--- You have to pay tax once but you can take a rebate, and the tax amount will be refunded).

So, we have to pay tax only when the annual income exceeds $9000 and even then the tax percentage is divided into different slabs (with a maximum tax percentage of 30%).

[donnovan86]

8 hours ago, rawque_gulia said:

Just sharing knowledge:- We have this here in India (and many other Asian countries too). Up to $6000, you won't have to pay any taxes, and up to $9000 is also tax free (but with a process--- You have to pay tax once but you can take a rebate, and the tax amount will be refunded).

 

I don't know the tax system for other countries. However, what you said doesn't matter for this topic because it's about DAC7, which only applies to people in Europe. 

[rawque_gulia]

15 hours ago, donnovan86 said:

However, what you said doesn't matter for this topic because it's about DAC7, which only applies to people in Europe. 

Lmao, so there's no point in mentioning the W-9 form for you as well...and taxes in US countries (if this thread is "just" about the DAC7). The purpose of the forum is to exchange knowledge and that's what I did.