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According to blog post by RetroDreamer Android developers have to pay sales taxes for their App sales in countries with have sales taxes while Apple developers don't as Apple pays the taxes directly.

Is this an accurate description? Is so, how do the various people who publish Android apps handle it?

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closed as off-topic by gnat, Bart van Ingen Schenau, MichaelT, GlenH7, Michael Kohne Jan 1 at 16:37

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I would imagine it would depend a LOT On local laws in each country. But I am not sure why the Apple vs Google store would make a difference –  Zachary K Jun 3 '12 at 14:11
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If Apple does the sale and pays the taxes than the developer doesn't have to deal with the issue. If on Android the developer however makes a sale (and not Google) the developer is responsible for it. –  Christian Jun 3 '12 at 14:20
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And what is different? If you worked for a company writing Android Apps, then your company would pay the relevent/due sales tax (just as Apple does for its employees). This is the difference from being a freelancer and being an employee - regardless of occupation, let alone platform. –  Wolf5370 Jun 4 '12 at 11:58
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This question appears to be off-topic because it is tour sales taxes. –  gnat Dec 30 '13 at 14:55
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This question appears to be off-topic because it is about legal matters outside of the community's experience and is best answered by an attorney with expertise in your jurisdiction. –  GlenH7 Dec 31 '13 at 13:03
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4 Answers

I don't know about "have to", but I think they answer is yes, we're supposed to handle the tax rates ourselves.

There's more information here:

You are solely responsible for specifying your own tax rates and for updating them if tax rates for your location change. Google won’t apply taxes to your orders if you don’t provide any tax information in the Merchant Center or via the Checkout API, so be sure to keep this information up-to-date. For tax assistance, please consult with a qualified tax professional.

That said, one of the options is to automatically use data from Tax Data Systems, and automatically apply tax rates based on zip code1 - so there shouldn't be anything for developers to upkeep.

1Not postal code. So it sounds like Tax Data Systems is only for the US.

( However, entering tax data is not required on the Android market. I still have it all empty. )

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I run an e-commerce business delivering goods to customers by UPS. The government which regulates my sales (the State of California) requires that I collect tax on goods which are delivered within the state of California. I consider UPS to be the customer's agent and I collect sales tax as if the customer came into my office.

All other states and countries are free to control their citizens as they wish, however, I am not handling anything with their taxes.

My opinion (not any actual advice) would be to find out what a comparable company in your location does when they sell packaged software and mail it elsewhere. Then talk to the tax collector with authority over you about how to handle this.

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It depends on the laws that are in place in your State, but usually 2 things helps to define the scenario:

  • you are not who is selling
  • Google is selling and trading using real money

the second statement could appear strange, but is not that obvious the fact that a digital store or in general some goods or services are being sell using real money, an example is the XBOX marketplace where all the trading happens through virtual money ( called Microsoft Points ) and this adds 1 more level of complexity and sometime is really tricky especially for people and developers outside the US, because you don't know how to consider this money and most advisors can't suggest a good strategy or do the right thing because is an unusual approach.

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I am not an acountant / this is not legal advice/ yadda yadda yadda

I dont believe you do need to pay sales tax (in the US). The reason is you are not the one conducting the sale, the vendor (Apple, Google) is the one conducting the sale. The money you get would technically be royalties, not sales revenue. They are the ones selling the app, and you are getting X per copy - much like an author would from a publisher. Obviously royalties would be a factor in income taxes.

Google, Apple, or the Buyer (via a Use Tax), on the other hand, would be the ones who were responsible for paying sales taxes.

Outside the US... have no idea. Would depend on local laws.

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Your logic is sound. You could also sum up your advice, Apple, Google, Ect all send the developer documentation of all income they generate. What sales tax you have to apply entirely depends on your physical location as a developer. In most cases only the customer pays the sales tax, based on their location, and ( Apple, Google,ect ) would collect the additional monies for tax purposes. income and VAT are an entirely different matter. –  Ramhound Dec 30 '13 at 16:54
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