Marketing payments: Taxes FAQ

Taxes in Marketplace

There are several types of taxes that you should be aware of in Marketplace. Each country has its own laws and Marketplace does its best to make taxes as simple as possible for consumers and for developers. However, we are not tax experts and you should consult your tax advisor with any issues regarding your specific situation.

Simply put, some places tax applications and some don't. Some places have Value Added Tax and some have Sales Tax.

Marketplace displays to consumers prices that include value added taxes based on the region that they have selected. The price displayed is pre-computed and is based on one of two factors: either the value added tax rate for the country, or the value added tax rate of the payment provider (which is generally 20% but may vary by payment provider). For instance, a US$.99 application costs approximately €.89 - which is close to the exchange rate plus a VAT of 20%. Because exchange rates fluctuate and VAT rates change, and we like to have 'user-friendly' numbers to display to consumers, the math won't be exact. The VAT is remitted to tax authorities by the payment providers. Depending on your tax situation, you may be entitled to claim this back, but you will need to consult your tax advisor.

Taxes may also be computed, as in the case of a sales tax, during the payment process. In this case, consumers will be advised that taxes may be applied to their purchase.

There is more information about pricing and payouts here.

Tax Withholding

Some countries' tax authorities require payment processors to withhold taxes if the currency is moved out of the country. In certain cases, in order to pay developers, the payment provider may need to remit withholding taxes on behalf of the developer in order to pay out in one of the currencies that they support. The withholding rates vary by country, but your payment information will detail exactly how much was withheld and by whom.