How about VAT?

How about VAT?

While the quest to bring an app from an idea to a reality is often filled with excitement and anticipation, it can also present certain challenges. One of which is listing the app on each of the App Stores.

To reach the intended audience in the best possible way, a great deal of research must be undertaken to determine the correct metadata to use. Images must be carefully selected to present the app, and pricing has to be carefully considered. There is a lot to think about. That’s why it can be a bit of grit-your-teeth moment when someone mentions a familiar little three-letter acronym: VAT. 

Fortunately, the folks over at Apple and Google have done a bit of work to make the inclusion of VAT in your app pricing an easy task to manage, as long as you are listing in the right countries. Rather than needing to research the VAT for each country you app will be available in, Apple and Google will handle it for you. In the case of Apple, the price in the store will always remain the same even with VAT changes, but proceeds will differ based upon this.

You are, for all intents and purposes, selling your app to Google or Apple each time it is purchased by an end user, while Google or Apple are selling that on to the user. This means that anything VAT-related is being covered without you needing to have any involvement in the complexities/administration involved.

As an example, if you were to list an app within the App Store at £10, VAT would be included in that price. That means that, with VAT excluded, the proceeds from any purchase would be £8.33. Apple would then take off either 30% or 15%, depending upon whether your app belonged to the App Store Small Business Programme. So for a £10 asking price, you are likely to retain £5.83 or £7.08.

To find out more, head over to Google and Apple’s respective help pages. While the UK is not explicitly listed within the Google guide, some tinkering in the Play Console implies that it is also being handled along with countries in the European Union. Brexit doesn’t seem to have had an impact there, which is positive insofar as administration is concerned. 

Chances are the country you’re after is handled, making the listing process that little bit easier! So next time you’re asked about VAT, you can breathe a sigh of relief.

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Article by Connor Booth, Business Analyst at The Distance