Attention, new Google Play Developer Distribution Agreement

Anyone share what should be paid attention to in this article?

Google Play Developer Distribution Agreement

Last modified: September 25, 2014 (view archived version)


Authorized Carrier: A mobile network operator who is authorized to receive a distribution fee for Products that are sold to users of Devices on its network.

Brand Features: the trade names, trademarks, service marks, logos, domain names, and other distinctive brand features of each party, respectively, as owned (or licensed) by such party from time to time.

Developer or You: Any person or company who is registered and approved by the Store to distribute Products in accordance with the terms of this Agreement.

Developer Account: A publishing account issued to Developers that enables the distribution of Products via the Store.

Developer Console: The console or other online tool provided by Google to developers to manage the distribution of Products and related administrative functions.

Device: Any device that can access the Store, as defined herein.

Google: Google Inc., a Delaware corporation with principal place of business at 1600 Amphitheatre Parkway, Mountain View, CA 94043, United States; Google Ireland Limited, a company incorporated in Ireland with principal place of business at Gordon House, Barrow Street, Dublin 4, Ireland; Google Commerce Limited, a company incorporated in Ireland with principal place of business at Gordon House, Barrow Street, Dublin 4, Ireland; and Google Asia Pacific Pte. Limited, a company incorporated in Singapore with principal place of business at 8 Marina View, Asia Square 1 #30-01, Singapore 018960.

Payment Account: A financial account issued by a Payment Processor to a Developer that authorizes the Payment Processor to collect and remit payments on the Developer’s behalf for Products sold via the Store. Developers must be approved by a Payment Processor for a Payment Account and maintain their account in good standing to charge for Products distributed in the Store.

Payment Processor(s): As specified and designated in the Developer Program Policies, a party authorized by Google to provide services that enable Developers with Payment Accounts to charge users for Products distributed via the Store.

Products: Software, content and digital materials distributed via the Store.

Store: The marketplace Google has created and operates which allows registered Developers in certain countries to distribute Products directly to users of Devices.

Am I mis-reading - or is Google now becoming responsible for tax collection on the paid app revenue - which would suggest the developer no longer has to deal with the complicated country-by-country tax rates to apply for each user and that type of thing. So now developer can avoid having to report to each individual country and submit taxes there etc. ?

It looks like it. All thanks to the new EU law. I couldn’t be happier, it was a pain in the ass for me dealing with sales on Google Play. Because of my country tax laws I had to do a lot of additional paperwork because of it. I am not 100% sure how it will be now, we’ll have to wait I suppose. Here are some hints:

Definitely they will take care of VAT. Not sure who will be doing the sales - still we or the Google. According to that EU law it would look as if beginning January 2015 Google is the seller, otherwise they wouldn’t have to pay VAT for us, but I haven’t found confirmation yet.

This is a link for the new developer agreement:
Google Play Developer Distribution Agreement
Last modified: September 25, 2014 (view archived version)

3.3 You are the merchant of record for Products you sell through the Store. The price you set for Products will determine the amount of payment you will receive. A Transaction Fee, as defined below, will be charged on the sales price and apportioned to the Payment Processor and, if one exists, the Authorized Carrier. Where either Google, the Payment Processor or the Authorized Carrier are required by applicable (local) legislation to withhold any taxes (“Withholding Taxes”) on payments made or received by anyone of them, Google will also deduct an amount equal to such Withholding Taxes from the sales price. For the avoidance of doubt, Withholding Taxes include, but are not limited to, withholding tax obligations on cross-border payments or imposed by telecommunications taxes. The remainder (sales price less Transaction Fee, and less the amount equal to any Withholding Taxes) will be remitted to you. The “Transaction Fee” is set forth here and may be revised by Google from time to time. You are responsible for providing any applicable tax residency certificates to Google. If Google or its service provider does not receive such documentation, Google will withhold at the domestic withholding tax rate.

3.4 Developer is responsible for determining if a Product is taxable and the applicable tax rate for the Payment Processor to collect for each taxing jurisdiction where Products are sold. Developer is responsible for remitting taxes to the appropriate taxing authority. Where Google, the Payment Processor or the Authorized Carrier is required by applicable (local) legislation to determine, apply and pay the applicable tax rate, Google, the Payment Processor or the Authorized Carrier (and not Developer) will be responsible for applying and collecting and remitting the taxes to the appropriate taxing authority. If Google collects and remits value added taxes on customer payments (where required of Google by applicable local law) and this remittance fulfils the applicable requirements for value added taxes on those customer payments, such taxes will not be passed on to Developer by Google. Where Google is required to collect and remit taxes as described in this section, Developer and Google will recognise a supply from Developer to Google for tax purposes, and developer will comply with the relevant tax obligations arising from this additional supply.

This seems to suggest that in THOSE PLACES where the local authorities want there to be tax withholding - or for Google (or carrier etc.) to be the one paying the taxes - then in THOSE cases the developer will not be responsible (perhaps Google will indicate in the payments to developer that which jurisdictions have been covered).

So if EU asks for this - then developer would not to be bothered dealing with EU or country specific tax calculations (and then submitting tax to those countries ?).

However for every other place it seems that developer would still remain responsible for paying taxes ?

So it is going to be a hodge-podge of the Apple App Store way of doing things (where Apple is in charge of tax submission etc. - and developer gets paid AFTER taxes have been cut already) - while Google will adopt a cut tax for some places - but not cut tax for other places … ?

We’ll see anyway how the reports will change. Sounds like Google is making a mess out of things as always.

I know most developers in my country don’t pay VAT for sales to people outside EU anyway, so it might not be a problem.

What is the situation now/previously - for all paid apps - whenever a user buys an app - Google takes it’s cut and passes on the rest to the developer ?

And the developer is responsible for figuring out the tax they have to pay (for EACH jurisdiction ?). So they would have complex book-keeping going on - where they keep track of purchaser’s origin - and then send that tax payment to each country (first figuring out WHO to contact - and in what format to phrase the payment etc.) ?

Is this system designed so Google doesn’t have to pay tax or what - or they want to take the 30% cut first - and then developer is ladled with the tax on the rest or on the full amount ? And Google pays tax (eventually for it’s 30% ?) - not having to worry about jurisdictions etc. and only pays U.S. tax then or what ?

Is the eventual result of this - that developers wind up not paying any tax - not contacting anyone. Just taking the money Google sends them and just sitting on it. Since - from what I have heard on this forum - many of the jurisdictions have tax brackets - where you only ever need to bother contacting those countries IF you are getting huge sales in those countries like have $50,000 revenue or something for that country etc.

But is the country informed - to expect this tax from the developer ? If no one knows - and those countries are not doing an extensive audit of Google and it’s 100,000 developers (or whatever) - then is this whole system setup to essentially NOT pay any tax ? After all the system of paying taxes should be designed to encourage or make paying tax easier. Then on top of that there needs to be some enforcement as well.

If developers are the only ones who know this revenue was generated - and if they are the ones saddled with the responsibility of paying taxes to authorities they don’t know about - with no hand-holding by Google - then what is the likelihood there will be any significant developer movement towards thinking about what taxes they need to pay to whom ?

Has Google created a “dark net” of revenue - which no one has visibility into - and which is essentially designed to (in effect) ENCOURAGE non-payment of tax ?

The way Google has DEFTLY avoided implicating itself in the tax regime would SUGGEST (to the developer) that this process is too wierd and complex - that even Google did not want to get involved with it. What hopes then are there for the developers to boldly go where no man has gone before ?

Google now acts like Paypal - they process the payments, but the sale is between the developer and the user. The 30% cut is a transaction fee.

Google avoids many things by doing that - for example they would have to create a subsidiary (that might not be the best word for it) in each and every EU country to deal with VAT because while small developers don’t reach the limits, Google would probably reach them in a matter of minutes in all EU countries. Now they will be forced to do so by the change of law that comes into practise in January 2015 (unless they can use the new MOSS system, I don’t know if it itself has limits).

Does this change concerns only paid apps, or i missed something ?:slight_smile:

Google itself holds and transfers the VAT in Europe, etc.
In other countries you decide to pay or not VAT.

See example in

This is right only from 2015, January 1st

In the past, i received the VAT and passed it on through my VAT return. However, since VAT registed companies must charge VAT, it is owed according to sales. But if this VAT is withheld, how to complete the vat return?? is there an opt out?

It is not withheld - Google pays it to the authorities in each of the EU countries you do sales to, including your own. So you don’t have to pay it for that sales. How to put that into accounting books - I have no idea. I am considering just invoicing Google as I do with adMob/Apple/Amazon but am not sure if it will be the right way (the resulting VAT would be 0% then, as it should).

“How to put that into accounting books”

that’s what im asking. when you make sales you owe VAT on those sales. if the VAT is withheld (and i mean withheld from the developer), then how to report this.