Recently I found out that if you publish a paid app on Google Play and want to distribute it internationally, you need to care for tax matters yourself in every country you are going to sell the app. I imagine paying for tax consulting in 50+ countries is no small issue.
How do you deal with this for paid apps and IAP?
In case that topic has been here already: “tax” as a keyword is to short for the search.
Ask an accountant in your country. It depends highly on your country (and in my country also on the will of the local tax office).
Thanks but before I ask people who don’t know what an application store is I prefer asking developers who have experience to get a first impression.
How can we help you? We don’t even know your country? In most countries of European Union you probably have to pay income tax on all sales and VAT on sales to people living inside EU. But it can vary greately. And your accountant doesn’t have to know what an application store is. Just explain to him how the sales go (sales of digital goods or services - that might depend on your country’s definition! - to people from all around the world).
Assume the seller sits in Germany / EU.
If the seller wants to sell to a Non-EU country, doesn’t he have to handle VAT issues with that country’s authorities? Sounds like much work if it is many different of that countries.
3.2. of the Developer Distribution Agreement (https://play.google.com/intl/ALL_us/about/developer-distribution-agreement.html) states “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.”
Why can’t Google provide a rough guide for this … since every developer will be duplicating this effort … !?
In a post in another forum which I found by accident and which addressed other developers’ concerns regarding this matter (without a solution), one expressed the theory that Google wants to promote free apps.
Can’t really believe everybody should consult an accountant for the same - probably simple - matter.
I guess this is another example of Google “don’t be evil” policy.
Why would a company contemplate the evilness of their venture in it’s infancy - unless it knew there was great potential for it.
And if stock is under pressure and company needs to meet bottom line - would they still adhere to that policy ?
As I understand from this article, you are only required to pay for VAT if you have a annual turnover of more than 35,000,- or even 100,000,- in that particular country.
Mobile Apps Developement and VAT | TaxAssist Accountants
Distance selling EU VAT thresholds » VAT Live
The reason they do this is simple: they save a lot of money. When dealing with VAT they would need - after exceeding the limits which are about €35.000 for most countries - pay it directly in the country the sale occured - that would require a lot of costly accounting and maybe even opening sub-companies in those countries. We developers won’t reach that limits but Google would really fast.
I don’t know how Apple and Amazon deal with this problem but somehow they manage. Google chose to put this burden on developers hands.
From the given facts I conclude the following for a German seller:
If he sells to the EU, he has to take VAT (if he also reached a special German VAT threshold, not to be mistaken with the given list in the other post).
If he sells outside the EU, he only has to take VAT if he is registered which he has to do if a threshold is reached corresponding to the list.
That aside, I guess other developers in the forum here take VAT, too. Can they tell their situation, like from which country they sell to which country and how they handle VAT? Mustn’t be Germany. Just to get a rough idea how others do it.