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Do you have to worry about VAT with Apple and iOS?

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1 comment, last by dpadam450 9 years, 5 months ago

I have read in many places that the income you get from Apple is nothing you have to apply any VAT to, it will just be regarded as income since it is Apple that is the real seller. This is a bit confusing to me. Is this how it works or can someone explain? Bellow is one explenation I found:

(Btw, is it the same with Google Play?)

"I am neither a lawyer nor accountant, but I believe that with the way Apple has everything set up you should only pay income tax (if your country has such a thing). YOU are not selling anything (in the US, I don't need a seller's permit as I'm not actually doing any selling), Apple is selling things and you are being paid an amount that has already had sales tax and VAT taken out.

My accountant had to double check that this was correct when I first described to her how it works when I was setting up my business, but that was the conclusion she came to as well - I'm not a seller, I have a licensing deal (similar to recording artists with the record companies, each individual artist isn't getting a seller's permit).

Regarding US Sales tax, dre is correct - unlike the UK the $0.99 price is the price WITHOUT sales tax and the correct sales tax for the user's state is applied after the fact - which is how prices work in the US, we only see the before sales tax price, in contrast to countries with VAT (or at least the ones I've been to), where the price that you see on the item is the final price you pay at the register."

And here is another article: (epspecially look at the bottom that starts with: "VAT on Itunes Revenue"

http://www.gamesbrief.com/2012/11/ios-indie-game-developers-are-you-paying-too-much-vat/

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Everything you get from Apple is income. You don't have to calculate anything. It works exactly how you suggest in your first sentence.
The only thing you have to pay is income tax.

Sales between the US and VAT countries, as long as the US person is a registered company and not a sole individual consumer, then VAT doesn't need to be charged. I was just looking into this because I bought some 3D models from someone in Poland. It seems that since you are in direct dealings with Apple, a US company, that VAT doesn't apply.

If you sold your app through your website however, and someone bought it in the US, you are supposed to collect VAT, and would be legally in trouble for not collecting (not sure how strict this is around the world).

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