Affiliation/Commissions - Looking for feedback, ideas, suggestions

[Kian]

 @Ithiel and @kyli13 I need your help 🤔 Can you confirm me that the flowchart is correct?

Moreover I have one more question. Let's suppose that an affiliate has a commission of 100$. When you say you want an RCTI "GST included", which one would be correct?

1. GST Exclusive. RCTI with "Commission 100$" as invoice item plus 10% GST (10$). The total amount of RCTI would be 110$
2. GST Inclusive. RCTI with "Commission 90.91$" as invoice item plus 10% GST (9.09$). The total amount of RCTI would be 100$

 

 

[Ithiel]

Just now, Kian said:

 @Ithiel and @kyli13 I need your help 🤔 Can you confirm me that the flowchart is correct?

I do love a good flowchart! Yes, that is correct. 

Please keep in mind that for "Statement by Supplier OR <$75 AUD?" (per https://www.ato.gov.au/forms/statement-by-a-supplier-not-quoting-an-abn/), this relates to the payment... So even if they were receiving $5/month commission, if that built up to $80 and they wanted to withdraw it all at once... the payment would be over $80, so if they're an Aussie without an ABN, they'd need to have supplied a Statement by Supplier or be hit with the 49% GST witholding.

 

Regarding your question...

Scenario: A product is sold by a GST-registered seller for $1100 Inc. GST (meaning $1000 + $100 GST) and the affiliate makes a 5% commission.

• 5% Commission is calculated off the Ex-GST Amount (0.05 * $1000 = $50 commission).
• If "Credit Note without GST" scenario, the commission awarded to the affiliate is $50 (No GST)
  • If they sell this product 5 times, their total commission is $250 (No GST).
  • When requesting a payout, they would receive $250 and a Credit Note that makes no reference of GST
• If seller and affiliate both have an ABN and are both registered for, the commission awarded to the the affiliate is $50 + $5 GST
  • If they sell this product 5 times, their total commission is $275 Inc. GST ($250 commission + $25 GST)
  • When requesting a payout, they would receive $275 and an RCTI listing $250 commission, $25 GST, total $275 Inc. GST.

Similarly, in your scenario, assuming that the $100 you reference commission was calculated off the Ex GST amount, the answer would be #2.

An affiliate gets "paid" extra money if they're registered for GST, but they don't get to keep the extra bit as it goes to the ATO (tax office) :-)

 

Scenario 2: Another product is sold by a GST-Registered seller for $1000 GST-Free, because it was not a GST eligible product (some things are GST exempt),  and the affiliate makes a 5% commission.

• 5% Commission is calculated off the Ex-GST/GST-Free Amount (0.05 * $1000 = $50 commission).
• If "Credit Note without GST" scenario, the commission awarded to the affiliate is $50 (No GST)
  • If they sell this product 5 times, their total commission is $250 (GST-Free).
  • When requesting a payout, they would receive $250 and a Credit Note that makes no reference of GST.
• If seller and affiliate both have an ABN and are both registered for, the commission awarded to the the affiliate is $50 GST-Free (must reference that there was no GST)
  • If they sell this product 5 times, their total commission is $250 (GST-Free), from $250 commission + $0 GST.
  • When requesting a payout, they would receive $250 and an RCTI listing $250 commission, $0 GST, total $250 GST-Free.

There was no GST collected, so no GST is to be paid to the affiliate, but you need to still mention that.

 

Scenario 3: Two products were sold by a GST-Registered seller. One for $1100 Inc. GST, the other for $1000 GST-Free,  and the affiliate makes a 5% commission.

• 5% Commission is calculated off the Ex-GST/GST-Free Amount (0.05 * $1000 = $50 commission, 0.05 * $1000 = $50 commission).
• If "Credit Note without GST" scenario, the commission awarded to the affiliate is $100 (No GST)
  • When requesting a payout, they would receive $100 and a Credit Note that makes no reference of GST
• If seller and affiliate both have an ABN and are both registered for, the commission awarded to the the affiliate is $100 + $5 GST
  • When requesting a payout, they would receive $105 and an RCTI listing $100 commission, $5 GST, total $105 Inc. GST

Where GST is collected, it must be paid proportionately to the affiliate. When no GST was to be collected, no GST is to be paid. When its a mix, they just get their bit of the GST for the bits that incurred GST. 

Source: https://www.ato.gov.au/Business/GST/In-detail/Your-industry/Travel-and-tourism/GST-and-international-travel/?page=6

 

Summary:

• When issuing an RCTI, you need to include the extra 10% for any products that were sold Inc. GST
• As the RCTI needs to list the commission, the GST, and the total. If some commissions incurred GST and others didn't, they would need to be listed as separate line items on the RCTI.

Using this as a rough guideline (https://www.ato.gov.au/assets/0/104/694/815/f3b7bc3a-d97f-481d-ade4-464e7d6df32e.pdf), it would be laid out something like this:

• Commissions | $50 | $5 GST | $55 Inc. GST
• Commissions (GST-Free) | $50 | $0 GST | $55 GST Free
• Totals: $100 | $5 GST | $105 Inc. GST

 

In case you're wondering when products/sales aren't subject to GST...

• If I normally sell my hosting for $11 Inc. GST / Month,
  • Someone in Australia will pay $11 Inc. GST, so a GST-registered affiliate earning 5% commission would receive $0.55c Inc. GST.
  • Someone in Europe will pay $10 (GST-Free), so a GST-registered affiliate earning 5% commission would receive $0.50c (GST-Free) Commission.
• Even if my web hosting server was in Europe, as my business is registered in Australia, whether I charge GST for a GST-applicable product depends entirely on whether "the recipient of the service is outside Australia". 
• There are also products that are simply exempt from GST, but it's the sellers responsibility to configure their products accordingly.

 

Hope that helps!

Legal: I am not an accountant - please do not treat this (or any other post here) as personal financial or accounting advice. This is simply me describing this mess as best as I understand it. :-)

[kyli13]

On 8/10/2019 at 1:25 AM, Ithiel said:

describing this mess

Oh yes. Mess!

[Ithiel]

How goes the battle, @Kian? :-)

Please let me know if you need any additional information or if anything in the above didn't make sense. I'm really keen to try and test this out as soon as possible.

[Kian]

No problem but as I said weeks ago...

On 7/2/2019 at 2:53 PM, Kian said:

3-4 days 🤔 ... If I had free time. 

At the moment I had to pause this project because of this:

Anyway I confirm you that it's 100% doable so don't worry.

[Ithiel]

12 hours ago, Kian said:

At the moment I had to pause this project because of this: 

 

Well... Here's hoping that you managed to reserve the table in time, otherwise I guess we're all in trouble, haha.

Let me know if there's anything I can do/help with to get this higher on that rather terrifying list of yours :-D

[Ithiel]

On 8/3/2019 at 11:38 AM, Kian said:

I'll let you know when it's ready for Australia.

 

[kyli13]

On 8/3/2019 at 11:38 AM, Kian said:

I have finally finished the refactoring of Commission Manager 🏁 I only need to write a bit of documentation and a news (in multiple languages 🤢) before releasing it. Here you can find 38 screenshots with descriptions for every page/feature of the module.

As for Australian RCTI/ABN support, this part is NOT ready yet. At the moment the module can issue credit notes for commissions but "european-style". Credit notes can be issued:

• Automatically everyday
• Automatically every 1st of the month
• One demand by clicking this button

I'll let you know when it's ready for Australia.

 

Oooooo yay for when Oz is ready!

[Ithiel]

Hi @Kian,

Hope things are going well with your task lists.

We're really needing the affiliate functionality that we've been discussing, so I wanted to reach out and see how things were fairing.

Do you have any ETA on when things might be ready? (and is there anything I can do to help make it happen?)

Thanks! :-)

[Kian]

On 7/2/2019 at 2:53 PM, Kian said:

3-4 days 🤔 ... If I had free time. 

Told ya 😄 Anyway I need some help for GUID. Take a look at the screenshot below.

I check VAT Numbers using ABN Lookup via Web Service when customers register on WHMCS, update their VAT Numbers and automatically with Daily Cron of WHMCS. This way your RCTI will work in line with what ABN says (eg. Valid VAT Number  yes/no, registered for GST yes/no). I keep a copy of all checks locally on WHMCS storing entity names, ABN status, GST, business localtions - I still have to decide what values are relevant.

When you issue the RCTI, I take a snapshot of ABN and GST status and adjust it accordingly (VAT exemption, <75$ AUD rule, 49%, statement by supplier etc.). There's log where you can review changes to VAT Numbers and GST status. Moreover you can optionally receive a recap via email on a daily basis if there's something to notify.

This new toy works on paper but I can't test ABN Lookup functionalities without GUID. I can't register on ABN since I'm not Australian so... 😋 Can someone PM me his/her GUID?

 

Edited November 5, 2019 by Kian

[Ithiel]

3 hours ago, Kian said:

Told ya 😄 Anyway I need some help for GUID. Take a look at the screenshot below.

Haha, all's well that ends well! ❤️

3 hours ago, Kian said:

I check VAT Numbers using ABN Lookup via Web Service when customers register on WHMCS, update their VAT Numbers and automatically with Daily Cron of WHMCS. This way your RCTI will work in line with what ABN says (eg. Valid VAT Number  yes/no, registered for GST yes/no). I keep a copy of all checks locally on WHMCS storing entity names, ABN status, GST, business localtions - I still have to decide what values are relevant.

When you issue the RCTI, I take a snapshot of ABN and GST status and adjust it accordingly (VAT exemption, <75$ AUD rule, 49%, statement by supplier etc.). There's log where you can review changes to VAT Numbers and GST status. Moreover you can optionally receive a recap via email on a daily basis if there's something to notify.

This new toy works on paper but I can't test ABN Lookup functionalities without GUID. I can't register on ABN since I'm not Australian so... 😋 Can someone PM me his/her GUID?

Sounds good! I've sent you a message with my GUID.

Also, as a bit of a side note, ABN = Australian Business Number, so its referred to as either an 'ABN' or an 'ABN Number' (which is kinda like saying 'ATM Machine', I know), and the term VAT isn't used here.

The ABR (Australian Business Register) uses a GUID (Globally Unique Identifier) to allow ABN searches in the ABR Lookup Tool with their API, because we're all SOL remembering all these TLA's... 🤣

[Kian]

Thanks for the GUID. It works. I was planning to store the following parameters:

• ABN
  • Status (Active, Cancelled)
  • Effective from YYYY-MM-DD
• Entity
  • Status (Active, Cancelled)
  • Effective from YYYY-MM-DD
  • Type Code (DTT, PRV, IND)
  • Description (Discretionary Trading Trust, Australian Private Company, Individual/Sole Trader)
• Name
  • Legal/Business name (Nicole Kidman, Maximus Decimus Meridius LTD...)
  • Effective from YYYY-MM-DD
• Address
  • State Code (QLD, VIC)
  • Postcode (4557, 3193)
  • Effective from YYYY-MM-DD
• GST
  • Status (Yes, No)
  • Effective from YYYY-MM-DD
• ASIC
  • Number (I have no idea of what is this value)

Am I missing something? Should I remove some fields? I'm going to use these values on Invoices table and also for this panel.

I also want to ask another question. VIES of European Union and ABN are very similar. When I use VIES I know that I can't flood them with too many requests. There are limits (max 10k checks per day, max 5 check per VAT Number etc.). I can't find anything about ABN limitations. What should I do?

5 hours ago, Ithiel said:

Also, as a bit of a side note, ABN = Australian Business Number, so its referred to as either an 'ABN' or an 'ABN Number' (which is kinda like saying 'ATM Machine', I know), and the term VAT isn't used here. 

The ABR (Australian Business Register) uses a GUID (Globally Unique Identifier) to allow ABN searches in the ABR Lookup Tool with their API, because we're all SOL remembering all these TLA's... 🤣 

Descriptions are not final but yeah it makes more sense.

Edited November 6, 2019 by Kian

[Ithiel]

Awesome! That list looks really good. I don't know if all of it is needed specifically, but no harm in having those details there (as it would be useful to refer to them when they want to order a domain or something, since you need the ABN and registered business name to order a .com.au or .net.au domain). Having the dates recorded could be a good way to tell if the information is current as well

I'm not aware of any lookup restrictions on the number of queries. Maybe have it lookup the first time when the client file is saved (or on change) with a button to manually refresh everyone?

I.e. If someone isn't registered for GST when the record is first saved, but they later register, we need to make sure it can be updated, but I figure it isn't worth spamming their system with a lookup on every client on a daily basis.

As for their ASIC number, this is probably either their ACN (Australian Company Number) or the ID number that associates with their ASIC file showing their business name registration.

An easy way to check would be to look up our ABN and see if if "ASIC Number" matches anything you can see listed on either of the below:

• https://abr.business.gov.au/ABN/View?abn=31459636031
• https://connectonline.asic.gov.au/RegistrySearch/bySearchId.jsp?searchIdType=BUSN&amp;searchId=160487070

[Kian]

I'm sorry for asking so many questions but do you need to filter by all 143 entity types you have in Australia?

[Ithiel]

27 minutes ago, Kian said:

I'm sorry for asking so many questions but do you need to filter by all 143 entity types you have in Australia?

HOLY CRAP! I knew we had a lot of entity types in Australia, but I didn't know we had 143 of the dang things!

While it'd be kinda cool if I could filter (since it's potentially an upsell opportunity if they're a sole trader, and some are exempt from GST), it's not by any stretch of the imagination an 'important'...  If it can do it (and it doesn't take any extra work), great! I'm sure I'll find a use for it... but don't go out of your way for it, haha.

[Kian]

One quick question. Do you have Level 2 tax rate in Australia?

[Ithiel]

26 minutes ago, Kian said:

One quick question. Do you have Level 2 tax rate in Australia?

Not that apply to anything like this.

I'm not sure if it's what you mean, but we have things like Stamp Duty (buying land) and Import Duty (importing physical goods from overseas), but they wouldn't apply apply here.

If someone is using WHMCS to run their Real-Estate or Import/Export Business, then something has gone very wrong along the way...

[Kian]

Another question about "GST eligible products". Is this for real? 🤢 Let me explain.

I bet that Australians use WHMCS to sell things like servers, VPS, hosting packages, VoIP, domains, SSL certificates, custom IT projects, development, design, logos, computers and stuff like that. I suppose that all these products are "GST eligible". I hope that the answer to this question is "Yes" or "No" with NO EXCEPTIONS otherwise I'm going to hate Australia for the rest of my life.

Edited November 19, 2019 by Kian

[Ithiel]

5 hours ago, Kian said:

Is this for real? 🤢

Yup! 🤣

 

5 hours ago, Kian said:

I bet that Australians use WHMCS to sell things like servers, VPS, hosting packages, VoIP, domains, SSL certificates, custom IT projects, development, design, logos, computers and stuff like that. I suppose that all these products are "GST eligible". I hope that the answer to this question is "Yes" or "No" with NO EXCEPTIONS otherwise I'm going to hate Australia for the rest of my life.

The answer is "almost always yes" - https://www.ato.gov.au/Business/GST/When-to-charge-GST-(and-when-not-to)/GST-free-sales/#MainGSTfreeproductsandservices

However, this should be the store owners problem to figure out - not yours. :-)

In "Edit Product", there is a checkbox for "Apply Tax: Tick this box to charge tax for this product". It's entirely our responsibility as the store owner to know whether or not we should check this box for each product.

If the box is checked, the product will have GST Applied, as long as the client (purchaser) is subject to GST.

 

Whether the client is subject to GST is determined by these two things:

1. Is the client in Australia? (WHMCS determines this automatically based on the configured tax rules per the below and via the country setting in their profile)

[My GST Tax Rule in WHMCS] 

[Country option for a client account that is in Australia]

 

2. Is the client tax-exempt? (determined by this checkbox which can be enabled on a client's account)

[Tax Exempt option for a normal business in Australia (this client isn't tax exempt, so they get charged GST]

 

Finally, here is a picture of a baby Koala to make you feel better about Australia:

[Kian]

1 minute ago, Ithiel said:

If the box is checked, the product will have GST Applied, as long as the client (purchaser) is subject to GST.

😟 this was exactly the reason why I was scared. Argh... I'll need to consider GST on every invoice item but I can do that for that baby Koala

[Ithiel]

3 hours ago, Kian said:

... but I can do that for that baby Koala

Thank you!

[aquiss]

@Kian

Does your system support signups via a 3rd party signup form?

We don't use WHMCS own signup pages because they can't adapt to our business, but instead we use our own signup pages and then put everything into WHMCS via APIs. However, the one thing we would like to be able to do, is allow customers to signup to be affiliates via the client area, which gives them their unique ID, but then being able to grab this ID via our 3rd party forms, allowing us to allocate who referred who (manually if need be).

 

[Kian]

34 minutes ago, aquiss said:

However, the one thing we would like to be able to do, is allow customers to signup to be affiliates via the client area

Once registered, any customer can apply from WHMCS client area to become an affiliate if you enabled this option. You can also configure the module to force customers to accept your terms and condition and turn on/off manual verification (on: free for all, join and have fun. Off = customers need to be manually approved by you before they become affiliates). Of course you can still leave this feature disabled and manually add affiliates one by one.

43 minutes ago, aquiss said:

which gives them their unique ID, but then being able to grab this ID via our 3rd party forms, allowing us to allocate who referred who (manually if need be).

I don't why you need the unique ID (need more details) but you can allocate affiliates to customers directly from WHMCS interface by choosing any attribution model (manual, first-click / cookie based, interactive).

 

[madbutcher]

Hello, 

Is the Commission Manager currently working with the latest WHMCS? I see lot of negative reviews on the plugin page...

Any positive feedback from actual customers? 🙂

[Kian]

@Ithiel Finally it works 😭 but I still have two questions.

First question

On 6/30/2019 at 1:34 AM, Ithiel said:

the business owner legally has to withhold 47% of the commission amount (source).

Few posts later you say:

On 8/9/2019 at 5:25 PM, Ithiel said:

or be hit with the 49% GST witholding

47 or 49%?

Second question. Let's say that you owe 1000 AUD to your sales representative. This guy has has ABN and GST therefore I have to issue a RCTI / Credit Note with GST that will look like follows:

• Payout | 1000 AUD
• Subtotal | 1000 AUD
• GST 10% | 100 AUD
• Total | 1100 AUD

Is it correct?

Don't tell me that I have to extract VAT from affiliates' earnings 😨