What is VAT?
VAT is Value Added Tax imposed on most good and services provided by registered businesses. It is considered as an indirect tax because it is paid to the government by the businesses rather than the consumer.
How do Google Play and Apple iTunes handle VAT?
Each time an app is downloaded, Apple acts as an agent selling to app users which benefit developers because Apple handles the VAT compliance requirements.
Google Play makes it the developer’s responsibility to collect and pay the correct amount of VAT because the transaction happens directly between the developer and the app user.
What is VAT MOSS? How does it apply to developers?
VAT MOSS or VAT Mini One Stop Shop is a one-stop-shop approach that will allow developers to submit VAT filings to just one tax authority. The rules took effect on the 1st of January 2015 where businesses have to charge VAT wherein rates are based on the customer’s home country but don’t require registration, reporting or paying VAT in each EU member state. Instead, the simplified online portal allows developers to send quarterly EU VAT returns to HMRC, even though information relates to different countries and different VAT rates.
Google Play and VAT MOSS
Because of the EU VAT change on January 1, 2015, Google Play became responsible for determining, charging, and remitting VAT for all Google Play Store purchases. This transition lifted the burden to developers and made the process simpler.
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