There are no active ads.

Advertisement

Apple to Charge Local Taxes on Apps in Europe Beginning Jan. 1

by Todd Haselton | December 18, 2014December 18, 2014 7:30 am PDT

iPhone 6 vs iPhone 5s-1

Apple will start to charge consumers a local country-specific value added tax (VAT) fee on applications purchased through iTunes beginning on Jan. 1, according to documents obtained by AppleInsider. The changes reflect Apple’s plans to move from the current system, in which consumers who live inside of the European Union pay one standard tax for the entire European Union as opposed to country-by-country.

“VAT will be based on the customer’s country of residence instead of being the same across all EU territories,” Apple explained in an e-mail to developers that was obtained by AppleInsider. “Note that prices for apps on the App Store include VAT, while the developer’s proceeds are calculated after VAT is deducted.” That means that the prices of an app might vary by country to country as the VAT varies, but apparently developers can expect the same cut.

AppleInsider said Apple is making the changes to comply to new regulations set in place in an effort to close some of the Apple tax loopholes. “UK App Store customers are currently able to bypass a 20 percent VAT through Apple’s routing of purchases through countries like Luxembourg, which has a 3 percent tax rate,” AppleInsider explained.

AppleInsider

Todd Haselton

Todd Haselton has been writing professionally since 2006 during his undergraduate days at Lehigh University. He started out as an intern with...

Advertisement

Advertisement

Advertisement