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You are here: MacNN Forums > News > Mac News > Apple to charge VAT per-country at European App Stores

Apple to charge VAT per-country at European App Stores
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MacNN Staff
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Dec 18, 2014, 10:13 AM
Apple has sent an email to iOS developers, notifying them of a change to the way it handles VAT (value-added taxes) at European App Stores. Currently the company charges a single VAT rate across the European Union; soon, though, it plans to charge on a per-country basis. The change is due to take effect on January 1.

It will likely force prices to rise in most countries, as previously VAT was charged at the lowest rate allowed in the EU. Apple cautions that a developer's portion of app revenue will be calculated after VAT has already been deducted, which will likely lead at least some developers to raise prices to make up the change.
( Last edited by NewsPoster; Dec 21, 2014 at 06:31 AM. )
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Dec 18, 2014, 11:30 AM
Quote: "It could force prices to rise in some countries if VAT is normally higher there." Could? That's a bit like saying the sun could rise tomorrow. MacNN should read Apple's email more carefully. No one has a lower VAT than Luxembourg, where Apple has been selling from. It's 3%, while in most European countries it's 20% or higher. If developers, musicians and authors don't raise their retail prices, they'll see their per-app income decline by about 20%. My advice is to take that VAT rate listings, go to Apple's website, and raise prices by a percentage equal to that country's VAT. Apple should have done what Amazon is doing with Kindle store prices and do that for their clients, sparing them this unnecessary hassle. At the very least, Apple should have offered automatically calculated price increases as an option. One click and the problem would be solved. Now, thanks to Apple's sloth, developers are going to have to spend perhaps several hours online, calculating and changing dozens of prices. That did not have to be.
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Dec 18, 2014, 01:34 PM
I don't understand.. you can choose which tax rate you sell to?
Flying Meat
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Dec 18, 2014, 01:50 PM
I understand that if you take off your shoes and socks, you get perhaps ten more digits to count with for free.
Spheric Harlot
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Dec 18, 2014, 02:23 PM

Previously, VAT was charged according to where your company HQ was located (Ireland for the online store, Luxembourg for the iTunes/App stores).

For people who business charges VAT, we pay the VAT, but it is directly figured against the VAT we collect through the bills we collect, at the end of the year. That only works for locally paid VAT, though, because I pay my taxes here in Germany, not to the EU.

It was a total bitch getting VAT-less bills from download stores, requiring the customer to request a new bill and go through a whole hoopla, which is only marginally worth it even for something like Final Cut Pro, where 20% VAT do make a decent dinner's worth of difference.

Now, it looks like I'll finally be properly billed for all business purchases automatically.

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Dec 18, 2014, 04:00 PM
I think it's safe to say that the various tax laws as they pertain to the blossoming online commerce arena in countries worldwide are woefully out of date, and I don't envy companies that do business internationally and have to maneuver differing tax regulations and responsibilities the world over.

A good demonstration of how out of date and inapplicable current tax laws are to the internet age would be to explain the difference between sales tax and use tax to someone and watch their head explode.

"Wait, you mean because NewEgg didn't charge me sales tax that I am now responsible (depending on the state) for paying use tax to my state on the order? You mean my purchase *wasn't* tax free?!"
Spheric Harlot
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Dec 18, 2014, 05:48 PM

That's also the Number One Argument I bring up whenever some idiot warms up the argument about Apple's 30% flat commission on download sales.

The second you deal with international tax regulations for VAT (which tends to happen above a certain yearly revenue that varies wildly from country to country, but is often as low as 1000€), you need to deal with all that crap and cannot sell directly otherwise without risking charges for tax evasion.

The Rogue Amoeba guys got hit with that at some point and would actually have been arrested if they'd travelled to Europe, though they settled amicably eventually. They simply weren't aware that this was an issue.

Apple's flat 30% for international distribution is among the cheapest deals on international sales bookkeeping that you can get.
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