Publishing your creations on Google Play Store is a very nice thing. Your work gets easily noticed and accessed by a large amount of users. It's even better when they are prepared to pay for that access, you get something in return for the time invested into making that content. But it's not as easy as one might think.
There are many laws in place that not everyone is familiar with. More specifically, tax laws. How do VAT/GST rates affect the price of your app? How do you calculate that? How does it affect your earnings? Do you have to report it and to whom? Where can you even sell your app?
I feel like this is a topic that gets easily overlooked. Which is why I spent the last week going through the legal information I could find about this.
At the moment of writing this, you can publish you app for free in 149 countries. 145 of those support publishing paid apps. And only 51 of those support tax-inclusive pricing.
Why does this matter?
Because unless stated otherwise, you are responsible for determining the applicable tax rate for your apps in all jurisdictions and for remitting the taxes to the appropriate taxing authority.
For your convenience I created a simple list of the countries, divided into three parts: Source
ad. 1Countries where, due to tax laws, Google is responsible for determining, charging, and remitting VAT or GST to the appropriate authority for all Google Play Store paid app and in-app purchases by customers in those countries.
- European Union: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden
- United Kingdom (remains subject to EU law and part of the EU customs union and single market until 31. 12. 2020)
- Albania
- Liechtenstein
- Morocco
- Norway
- South Africa
- Taiwan
- Turkey
- New Zealand
- Singapore
- Malaysia
- United States
ad. 2Countries where, due to tax laws, Google is responsible for determining, charging, and remitting VAT or GST to the appropriate authority for all Google Play Store paid app and in-app purchases by customers in those countries. **Unless you are located in that coutry.**
- Australia
- Bahrain
- Belarus
- India
- Russia
- Saudi Arabia
- Serbia
- South Korea
- United Arab Emirates
ad. 3Countries where you are responsible for charging, remitting, and reporting on any taxes to the National Tax Agency of those countries.
- Japan (has a different law than others)
- Argentina (doesn't have a mechanism provided for collecting sales taxes)
- other countries not mentioned on the list
How does that apply to me?
If you are located in any of the countries in section 1, you can sell apps on Google Play Store in any of the countries in sections 1 & 2, without having to do anything else.
If you are located in any of the countries in section 2, you can sell apps on Google Play Store in any of the countries in sections 1 & 2, but you are responsible for charging, remitting, and reporting on any taxes to the National Tax Agency of your country. The rest are taken care of automatically by Google, like in the previous point.
If you sell your apps in any of the countries in section 3, you are responsible for charging, remitting, and reporting on any taxes to the National Tax Agency of those countries, no matter whether you are located in one of those countries or not.
You can easily choose in which countries the app is available for sale (and for what price) when publishing the app in the Pricing & distribution section of the Google Play Console.
OK, but where do I set the sales tax rate?
In your Google Payments profile. If the rate is not already set, just search Google for sales tax COUNTRY_NAME and you will see a card with the % in bold. Source
DISCLAIMER All information available in this post is provided without any warranty, express or implied, including as to their legal effect and completeness. The information should be used as a guide and modified to meet your own individual needs and the laws of your state. Your use of any information or forms is at your own risk. I expressly disclaim any warranty: I am not creating or entering into any Attorney-Client relationship by providing information to you. Communications between you and me are NOT protected by the attorney-client privilege since I am not providing legal advice. For legal advice consult your tax advisor.
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