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Partita Iva- Italian sellers


carlottaworks

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Hi, I need help from other Italian sellers with a partita iva. I have recently opened my partita iva and my accountant has asked for a document that shows the amount of money taken by the platform yearly or monthly ( 20% of each order). He told me that I could consider that as an expense. I have asked the customer service, but they told me that I can have only a document with the total earnings... Someone knows what I can do? How do you declare your expenses?  

Grazie mille 

Carlotta

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Hi!

I've googled what partita iva means, and I'm on the same boat as you, but in a different EU state. 

I've asked my lawyer, my accountant and Fiverr's CS about this a while ago, and from what I've learnt, the income is what's available for withdrawal. Accounting wise, the income only represents what you can withdraw from Fiverr, meaning that the 20% cut is not even taken into consideration, since you will only ever gain the 80% of the "sale".

Theoretically, you could never count the 20% sum as an expense, since the 100% sum never entered your balance account so you can pay the 20%. I've had the same question a while ago, and the conclusion was that according to Fiscal Law (at least here in Romania), the income represents only the 80%, and you're not directly contracting with the buyers (they're not the beneficiars of your services, and thus they're not paying you), but you're contracting with Fiverr as your beneficiary (Fiverr is paying you, not the customers). Imagine that the buyer is paying Fiverr, Fiverr takes it's 20% cut, and then you get paid by Fiverr. I know most of the national EU civil and fiscal law impose that if any tertiary comissioner is involved for a fraction of the sale (how's Fiverr in this example), the invoice should be always emmited to your beneficiary (which is the customer), but in reality, this is not happening since we're not receiving the money from the beneficiary, virtually changing the beneficiary from our customers to Fiverr.

Again, it might sound confusing, since it appears as we're dirrectly contracting with the customers when Fiverr acts as a comissioner middle-man, but in reality we're contracting with Fiverr. If we were directly contracting with the customers, we would've had to create invoices for each and every order for the entire sum, and then Fiverr would send us an invoice for 20% for each order we had, which is not happening. Imagine how Fiverr could deal with let's say 20 invoces from every seller on platform monthly.

I hope my message helped more than it confused. Take this with a grain of salt, since our legal systems, allthought being similar, they're not the same, especially when refering to fiscal regulations. I suggest asking your lawyer or any Italian lawyer in fiscal field, to check out the internal regulations as well!

Edited by hzsmith
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Posted (edited)
23 minutes ago, hzsmith said:

Hi!

I've googled what partita iva means, and I'm on the same boat as you, but in a different EU state. 

I've asked my lawyer, my accountant and Fiverr's CS about this a while ago, and from what I've learnt, the income is what's available for withdrawal. Accounting wise, the income only represents what you can withdraw from Fiverr, meaning that the 20% cut is not even taken into consideration, since you will only ever gain the 80% of the "sale".

Theoretically, you could never count the 20% sum as an expense, since the 100% sum never entered your balance account so you can pay the 20%. I've had the same question a while ago, and the conclusion was that according to Fiscal Law (at least here in Romania), the income represents only the 80%, and you're not directly contracting with the buyers (they're not the beneficiars of your services, and thus they're not paying you), but you're contracting with Fiverr as your beneficiary (Fiverr is paying you, not the customers). Imagine that the buyer is paying Fiverr, Fiverr takes it's 20% cut, and then you get paid by Fiverr. I know most of the national EU civil and fiscal law impose that if any tertiary comissioner is involved for a fraction of the sale (how's Fiverr in this example), the invoice should be always emmited to your beneficiary (which is the customer), but in reality, this is not happening since we're not receiving the money from the beneficiary, virtually changing the beneficiary from our customers to Fiverr.

Again, it might sound confusing, since it appears as we're dirrectly contracting with the customers when Fiverr acts as a comissioner middle-man, but in reality we're contracting with Fiverr. If we were directly contracting with the customers, we would've had to create invoices for each and every order for the entire sum, and then Fiverr would send us an invoice for 20% for each order we had, which is not happening. Imagine how Fiverr could deal with let's say 20 invoces from every seller on platform monthly.

I hope my message helped more than it confused. Take this with a grain of salt, since our legal systems, allthought being similar, they're not the same, especially when refering to fiscal regulations. I suggest asking your lawyer or any Italian lawyer in fiscal field, to check out the internal regulations as well!

Thanks for taking the time to answer me. I understand what you mean. I will explain that to my accountant. I guess from now on I will increase my prices… 

Edited by carlottaworks
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9 hours ago, carlottaworks said:

Thanks for taking the time to answer me. I understand what you mean. I will explain that to my accountant. I guess from now on I will increase my prices… 

No worries! I was in the same situation as you. And when you draw the line and see how much you're actually making from a sale (after Fiverr's cut, and national taxes applied), rising the prices is indeed the only option. It would've been awesome to be able to register the 20% as expenses, as we would've been able to use that to balance our entity account and at least deduct the VAT on that, but sadly it is what it is.

And then you will always have that customer that is saying 10$/service is too much and is very expensive, when you actually make (after fiverr's cut, national tax, conversion tax and transfer to account tax) less than a NET of 4$ haha.

There are to many freelancers here that don't declare their income and basically work under the radar, therefore there will always be someone with lower prices than you. But hey! Know your worth and never fall into the pit of price dumping. Your time is valuable!

 

Edit: You can use the fiverr's Promoted Gigs invoice and Seller Plus invoice as expenses each month, since we're receiving an invoice from the party we're contracting with (Fiverr). It's not much, but at least it's a proven written expense. Also, from what I've learnt in accounting, you can even register your expenses with the conversion rate and withdrawal taxes of payoneer and paypal. It's not much, but it's a step forward!

Edited by hzsmith
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