Beware of Afternic [remitting] your money!

[789.xyz]

I sold a domain for $14,915, but initially, they only paid me $901.12 per month.
After emailing them to raise the issue, they admitted to a calculation error, and the total amount turned out to be $300 more than previously stated!
Afternic's high fees have already drawn widespread complaints, and now they're being careless and greedy on top of that! Please be cautious with Afternic and consider looking for better alternatives.

 

[Jannes]

So they either waive the tax (why?) or the stated monthly payment ($932.19) means gross, not net.

 

[GoDaddy]

Hi @789.xyz
Afternic's support team will be reaching out to you shortly.

To summarize, your payout of $901.12 is the monthly total after tax. In your UI and the screenshot in your post, you'll notice a $372.88 tax figure for your entire transaction. This amount is deducted monthly - $372.88 over 12 payouts, equaling $31.07 per payout.

Afternic doesn't retain the tax. We're required to collect and remit it to the appropriate authority for your Lease to Own payouts.

 

[VadimK]

Hi @789.xyz
Afternic's support team will be reaching out to you shortly.

To summarize, your payout of $901.12 is the monthly total after tax. In your UI and the screenshot in your post, you'll notice a $372.88 tax figure for your entire transaction. This amount is deducted monthly - $372.88 over 12 payouts, equaling $31.07 per payout.

Afternic doesn't retain the tax. We're required to collect and remit it to the appropriate authority for your Lease to Own payouts.

This tax is not listed on the invoice. How can I get a receipt confirming that it has been deducted? I need it for my accountants in Spain. On top it's unclear where this tax is going to or if it should even be collected at all. Can you clarify on it? This tax indeed looks very suspicious.

 

[biggie]

HI

Congrats on your sale!

let's hope buyer makes all 12 payments.

imo...

 

[GoDaddy]

This tax is not listed on the invoice. How can I get a receipt confirming that it has been deducted? I need it for my accountants in Spain. On top it's unclear where this tax is going to or if it should even be collected at all. Can you clarify on it? This tax indeed looks very suspicious.

We do list it on the Payout Transmittal, which is available to download alongside your LTO invoice through https://www.afternic.com/sales/leased

 

[VadimK]

Ok, it’s there. But the question about this tax remains unanswered. Honestly, I truly believe that only a tiny fraction of your clients are the ones for whom this tax should actually apply (if any!), yet you’ve made everyone pay it - just to pocket the huge difference. It’s clearly just another source of income for GD.

I’m getting rid of all LTO for domains listed under 5000 (and only keeping LTO for a few listed at much higher price). Paying 30% + tax on top is absurd. And now I’m stuck paying 30% instead of 20% because there’s no longer any real reason to keep a lander with you. Domains aren’t even on “search” anymore, and for type-ins, I can keep them with Dynadot for 10%. Thanks, but no thanks.

Afternic (read GD) isn’t just shooting itself in the foot with greed the size of a football field - it’s gone shooting higher and between...

 

[DN_Hunter]

I wish they could provide more details on when the TAX is charged -- like a spreadsheet of some sort or a tool like a TAX Calculator -- enter Seller location, Buyer location, Sold Amt, Commission charged, etc...

I guess I have to add this into negotiations when a broker reaches out to me -- I have to ask will there be a TAX involved, and how much???

 

[alcy]

I dont get

this is a big title

so is anybody stealing anybody money or not?????

 

[DN_Hunter]

I dont get

this is a big title

so is anybody stealing anybody money or not?????

I don't think anyone is stealing money. There's just a TAX involved for some transactions based on the parties involved (location of buyer and seller)

 

[VadimK]

I don't think anyone is stealing money. There's just a TAX involved for some transactions based on the parties involved (location of buyer and seller)

The complete lack of transparency here makes me think they do. On the back end, they mix everything together under "Sales Tax/VAT/GST," basically telling everyone "Don’t ask questions - it’s complicated, and you are stupid. Just pay."

I’m not an accountant, and I know that taxes can be incredibly complex. But for example from what I know (based on my other business in Spain), paying actual VAT (where it's involved) is on buyer, not the seller.

 

[Jannes]

I believe Afternic is the seller of LTO service and you are the buyer. Domain buyer's location is irrelevant here.

 

[VadimK]

I believe Afternic is the seller of LTO service and you are the buyer. Domain buyer's location is irrelevant here.

It’s possible they’re the seller of the service, but here’s how they "explain" this tax: "In certain regions, the commissions charged for LTO service are considered taxable''. Key phrase: certain regions. This implies the buyer's location does matter.

Now, the real question is: does everyone using LTO get charged this tax? If the answer is yes, then it’s clear they’re keeping part of the money. After all, it’s only in specific regions that this service is deemed taxable.

 

[Jannes]

It’s possible they’re the seller of the service, but here’s how they "explain" this tax: "In certain regions, the commissions charged for LTO service are considered taxable''. Key phrase: certain regions. This implies the buyer's location does matter.

Yes, the service buyer's (=domain seller's) location matters.

In any case it is obvious that they need to explain this tax better using example cases or something.

 

[DN_Hunter]

It’s possible they’re the seller of the service, but here’s how they "explain" this tax: "In certain regions, the commissions charged for LTO service are considered taxable''. Key phrase: certain regions. This implies the buyer's location does matter.

Now, the real question is: does everyone using LTO get charged this tax? If the answer is yes, then it’s clear they’re keeping part of the money. After all, it’s only in specific regions that this service is deemed taxable.

I've had 8 LTO transactions so far, and none of them were charged a TAX.

 

[Ssaammiiee]

Great points to note in the comments session

 

[VadimK]

I've had 8 LTO transactions so far, and none of them were charged a TAX.

Recent purchases? They charge immediately when the sale occurs. But even more so - if this doesn’t apply to everyone, - we need to understand who, when, and under what conditions is required to pay this tax.

 

[DN_Hunter]

Recent purchases? They charge immediately when the sale occurs. But even more so - if this doesn’t apply to everyone, - we need to understand who, when, and under what conditions is required to pay this tax.

The 2 most recent were a few weeks ago on December 21st and December 27th

If BUYER LOCATION does not matter, then I guess LTO for the seller is either always TAX or always NON-TAX.

How does VAT work? I am in the USA, and I'm not sure how/when the VAT gets charged -- and also if that depends on BUYER LOCATION? And also if VAT gets rolled into that TAX bucket for the LTO Transactions?

Question: Does anyone here as a SELLER have LTO transactions where some have TAX, and others do NOT have TAX? Or is it always one way or the other?

 

[VadimK]

Question: Does anyone here as a SELLER have LTO transactions where some have TAX, and others do NOT have TAX? Or is it always one way or the other?

Well, that's what I am interested to find out as well. Here is mine LTO, started in Oct. I am in Spain.

 

[Name2go]

How does VAT work? I am in the USA, and I'm not sure how/when the VAT gets charged -- and also if that depends on BUYER LOCATION? And also if VAT gets rolled into that TAX bucket for the LTO Transactions?

I am German with EU VAT ID which means that I have to pay 19% VAT if I I sell or lease a domain to another EU citizen. In principle, because if the buyer also uses an EU VAT ID then VAT has to be paid by them with the rate of their home country.

I don’t have to pay VAT for a domain sale/lease outside the EU even if the buyer is a company. Most buyers are from USA, Canada, UK, Asia, Middle East, thus deals with VAT obligation are just a few.

GD commission is a middleman income and not part of this EU VAT regulation for digital services between an EU provider/seller and an EU receipiant/buyer.

Of course, GD principally has to pay income tax and possibly VAT for commissions based on US and/or EU or other law.
However, what is the justification for invoicing the tax on commissions to customers who paid these commissions. Commissions compensate all GD costs for their services, including tax. This is just how I understand it. Or how I misunderstand it because there is no substantial explanation to learn from.

 

[Name2go]

I believe Afternic is the seller of LTO service and you are the buyer. Domain buyer's location is irrelevant here.

Smart. This is the solution of the puzzle, if GD uses an EU VAT ID.

Why don´t they tell us. We rack our brains and waste time on such questions. Moreover, transparency would not be a bad thing for our accounting.