Starting on 1 January 2024, Hotmart will act as an agent for creators, representing them to buyers, cocreators and affiliates. This change is the result of updates to Hotmart's business model that will initially apply to sales made to buyers in Colombia, regardless of the creator's location.
What do these updates mean to me?
These updates will give you more autonomy and flexibility in developing your business strategies, increasing your decision-making power and potentially bringing more benefits, such as
- Tax management: Manage the tax aspects of your business to better control your sales and cash flow and potentially grow your business;
- Product classification: Determine the nature of your product (e.g., educational products, live interaction, etc.) to potentially benefit from tax regimes and exemptions that may be applicable to some creators, companies and/or products.
With the updates to the business model, you'll be responsible for determining the taxes on sales made in Colombia.
As a creator, you'll have a direct relationship with your buyers and will be responsible for tax assessment and calculation (knowing if and how much tax to pay), tax collection, remittance (tax payment), and invoicing for each sale made in Colombia.
As a cocreator or affiliate, you'll have a direct relationship with the creator you work with and continue to be responsible for any taxes that may apply to you and your services.
We have compiled a list of frequently asked questions regarding our business model and categorized them for easy navigation. To access the information you need, simply click on the question, and the corresponding answer will be displayed:
Questions related to business model updates and first steps
What are the benefits of updating the business model?
Updating the business model can provide creators the autonomy and flexibility to develop business strategies, enhancing their decision-making ability. Additionally, it can improve control over sales, cash flow management, and determination of the nature of the product, which can potentially result in tax deductions and exemptions.
What are my responsibilities in this new business model?
Who will be affected by the business model changes?
Is it possible to keep using the current business model?
How should I prepare for the upcoming business model updates on January 1, 2024?
Creators, cocreators, and affiliates are advised to consult with their accountants and lawyers to understand their accounting and tax obligations in each country where they provide services and sell products, including Colombia.
To prepare, it is important to know the location of your buyers and, with the help of an accounting expert, determine the countries where your products will be subject to taxes and the corresponding tax obligations that arise from these sales.
Will these changes impact sales made in Brazil?
Is it necessary to register a company in Colombia to sell products there?
Not necessarily. Selling to customers in Colombia does not necessarily require setting up a company, but there may be applicable taxes, such as VAT on digital products.
It is important to understand the tax implications of selling digital products and to check whether the product you sell is taxable in the buyer's country. We recommend consulting an expert on this matter. In addition to compliance obligations, there may be exemptions applicable to your case.
Are there accountants or tax advisors with sales expertise in Colombia that I can consult?
How can I find out more about the changes to Hotmart's business model?
How will this impact contracts that are currently in force?
Questions related to applicable taxes
How can Hotmart’s business model updates impact me tax-wise?
The business model for global sales is being updated to align with the Brazilian scenario. This means that creators, cocreators, and affiliates must report the amounts due to the IRS to avoid discrepancies in values.
The same process applies in Colombia. Failure to pay or declare taxes correctly may result in notification from the Colombian tax authorities. As a creator, you have the freedom to define and implement your tax strategy.
Is it necessary to seek tax advice to deal with these changes?
Will Hotmart provide tax consultant support for its users?
Which invoices will Hotmart issue for creators, affiliates, and cocreators?
Will taxes be applied for each sale, regardless of whether the amounts are transferred to Colombia or not?
What are the applicable taxes by country, and how should I file my tax return, considering the updated business model?
How does this change affect taxes for individuals starting a business in the USA?
Which tax structure best suits the updated business model?
We recommend you seek advice and assistance from your accountant or lawyer to develop your strategy.
As a creator, am I required to pay taxes related to my affiliates?
Is it possible to download the invoices related to payments made to my affiliates for reporting purposes?
There is a specific report located in Sales > Reports > Affiliate Payments which contains details of your affiliates such as: first name, last name, document (Tax ID), country, address, number of sales and the sum of commissions from sales made, paid to the affiliate that will help you generate invoices.
ATTENTION: The details of the amount to be declared must be confirmed between the creator and their accountant.
What amount should I use in my invoice for a product priced at US$ 1000 + VAT?
Questions related to invoicing for sales made in Colombia
If I make a sale to a buyer in Colombia, am I obligated to issue a Colombian invoice even if my company is not located there?
Do companies located outside of Colombia need to issue invoices or electronic invoices for sales made within the country?
According to the tax legislation in force in Colombia as of December 11, 2023, sales transactions made by non-residents of Colombia to buyers located in Colombia are not subject to the issuance of e-invoices in Colombia. However, it is essential to confirm with your tax or accounting advisors the type of tax document that should be issued in this situation.
In general, it is necessary to issue a document, such as an invoice, to support the transaction. The document should contain relevant information, such as the value of the operation, date, description of the product or service sold, name and address of the seller, and name and address of the buyer.
What platforms are available for issuing invoices for sales made in Colombia?
Hotmart offers native integrations with Alegra, a Colombian platform that specializes in invoicing and accounting, and eNotas, which serves Colombia and Brazil. Additionally, you can use the sales reports available on the platform to integrate with other tools via API.
For more information on available options for issuing invoices, please refer to the article Accounting & Tax Solutions.
How will currency conversion be carried out for invoices in Colombian Pesos?
Questions related to sales, withdrawals and commissions
Is it possible to restrict sales to Colombia?
How should I adjust my product pricing to account for applicable taxes in Colombia?
For creators outside of Colombia, will the 19% VAT for sales in Colombia be applied automatically at checkout, or is it the creator's responsibility to activate it on the platform?
Will there be any impact on chargeback and refund processes? Can I refuse refund requests during the guarantee period?
Will commissions for cocreators remain the same?
Will the changes to Hotmart's business model affect commission payouts?
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