New tax changes could affect App Store pricing for E.U. shoppers

Apple has sent out an email to iTunes Connect developers announcing a change in how taxes are calculated for App Store purchases in the European Union. Starting January 1, 2015, Apple will charge customers the value-added tax, or VAT, rate based on the country in which they reside rather than calculating a flat VAT rate for all countries in the European Union.

According to the email, Apple says:

On January 1, 2014, value-added tax (VAT) rates for apps will change for all territories in the European Union. VAT will be based on the customer's country of residence instead of being the same across all EU territories.

Additionally,

Developer's proceeds are calculated after VAT is deducted.

The effect for consumers is that prices for apps could potentially increase if customers reside in an E.U. country with a high tax rate.

Dan Thorp-Lancaster
5 Comments
  • VAT or any kind of tax for apps is BS.. Tax is BS on it's own.. Why they need to tax me? Am I getting better app? This world is really f*cked up.. Especially the relationship between EU and US..
  • Federal Tax, State Tax, County Tax. City Tax, Income Tax, Sales Tax, Valued Added Tax. I know I haven't listed everything but we get the idea. I calculate 60% of our earnings goes to taxes. Sent from the iMore App
  • 60? Lol. Maybe if you are a smoker and lotto player. Sent from the iMore App
  • Between earning money and spending it, I pay 60% taxes, just for consumer goods: I live in the Netherlands and build websites as a contractor. If I send you an invoice of € 100, I have to build in € 20 tax (21% actually). I get to keep € 80, of which I have to pay 25% to 55% income taxes, depending on how much money I make that year. So let's say I don't earn > 55K/year and I get to keep € 50. But digital money on the bank is useless, so I buy myself a € 50 winter jacket for it. Again, 21% tax so a € 10 goes to taxes. Effectively, of my € 100 invoice payment, € 60 goes to taxes. Not even paid my business expenses, federal taxes etc. Didn't even smoke or play lotto ;)
  • It's true: from the next 1st january the vat will be applied on the country of customer. I wish to underline that until the next 31st dec, the vat rate is not a standard one, Until that date apple still continue to app,y the vat rate where they are vat reg in europe. As a consequence is not correct apple is applying a lower rate... more over actually apple is in ireland where vat rate is 23%! Only in scandinavian is greater! ...it can be an excuse for growth the price...
    At the end...no pther taxes change.
    I am an expertise vat consultan. Be sure!