I'm joining from Turkey and I want to take my game to America. I don't understand tax systems. I have a Foreign Tax ID number. Will I be responsible for the tax? Am I going to pay taxes?
I’m not a lawyer, but here’s my understanding of the situation:
Itch has two different Payout modes found in “settings” -> “Payout Mode”:
Collected by itch.io, paid later
itch.io collects your payments, you request to be paid in bulk later. itch.io’s default payment providers are used.
and
Direct to you
You get paid immediately each time a purchase is made. You must link to payment providers you wish to support.
When using the first method, Itch.io will take care of sale taxes for you, including VAT, and you can claim the rest as income. However keep in mind, it’s your responsibility to pay income tax, how to do that differs from country to country.
For the most part, you can claim that as income as an individual trader, or a one-man company. The pros and cons differ by country, I’m not familiar with how they work in Turkey.
When using the second method, you are responsible for paying VAT, and possibly other sale taxes. I’m not familiar with all the details on this mode, so I’d rather not say much.
I have a Foreign Tax ID number.
If you go to your account settings, you should fill a tax interview, that will let you know how much tax you will pay for sales in the US, using that number.
If you are new to trading, it’s best to let Itch.io handle taxes for you, and once you are more comfortable, you can investigate if handling it yourself is better.
If you are unsure about how to pay income tax in your country, I strongly suggest to visit the government’s website, or visiting a lawyer, to learn more about it. This is needed before you start earning money, to make sure you do everything properly.
I understood. Thanks. So İtch.io collected by the government, paid later Do I need to pay any taxes when I choose payment mode? I have a Turkish tax ID number. But I'm going to sell in America. İtch.io pay the payments? When I choose that payment method, is there any other tax or other payment, business, along with my tax identification number?
So İtch.io collected by the government
No government is involved into this process. Itch.io collects the money, and pays them to you directly when requested.
Do I need to pay any taxes when I choose payment mode?
Yes, you need to pay income tax. That’s when you go to your government and say “I’ve made X amount of money on the past year, by being self-employed” and the government replies with “Ok, you owe Y amount for taxes”.
This is a simplification, and the details might change from country to country.
In most cases, you pay income tax in the country you live in. If you live permanently in Turkey, then you pay the tax there. I’m not familiar with Turkey law on how to do that, so you will have to search that yourself.
It’s also worth noting that everything I’ve mentioned so far is for adults, a minor would need a guardian to take care of most of these steps for them.