How does taxation work on google play?

[Android Central Question]

I want to publish a number of apps on google play. How are taxes deducted from user purchases?



Are there any legal considerations, or play integrates taxation in the app's price?



In the documentation (base64 encoded):



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it's mentioned that:



" Purchases are made from the developer of the app. In most locations, the developer is responsible for charging taxes (where applicable). For customers in the EU Member States, Google is responsible for charging, collecting, and remitting the VAT on sales as a result of changes in EU VAT legislation"



What does this mean exactly? That I, as a developer, must include taxes within the app's price? Fair enough, but how?



Concerning the VAT,



"

Value Added Tax (VAT)

Google Play sales in which Google is the seller of record may be subject to Value Added Tax (VAT), or equivalent. VAT is applicable to countries outside of the U.S.

If a sale is subject to VAT, the VAT charged will be based on the applicable VAT rules for content.

"



How are VAT rules established for an app developed in Germany and sold internationally?

 

[Rukbat]

What does this mean exactly? That I, as a developer, must include taxes within the app's price? Fair enough, but how?

Figure about 7% and you'll cover most of the US. Then you're supposed to remit the tax to each state in which you made a sale in the previous quarter. (I've actually written software to calculate and keep records for that for one company. Just keeping the records and paying the taxes is almost a full-time job. Most developers don't bother.)

"Value Added Tax (VAT)

Google Play sales in which Google is the seller of record may be subject to Value Added Tax (VAT), or equivalent. VAT is applicable to countries outside of the U.S.

If a sale is subject to VAT, the VAT charged will be based on the applicable VAT rules for content."

How are VAT rules established for an app developed in Germany and sold internationally?

Google takes care of that - and I'd assume it comes out of what they give you, so if the EU VAT is more than 7%, I'd include whatever the VAT is in the price.