New Tax Changes May Increase E.U. App Store Prices
According to a report by iMore, Apple has just sent out an email to all iTunes Connect developers, announcing a change in how taxes will be calculated for App Store purchases in the European Union.
It seems that Apple will now 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 E.U. starting from January 1, 2015.
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.”
“Developer’s proceeds are calculated after VAT is deducted”.
As a result of new tax changes, prices for apps are likely to increase if customers reside in an E.U. country with a high tax rate.