Selling Android apps and taxes
We are about to launch an Android app and while there is very little to no information to be found on the internet regarding taxes, I'm asking my questions here.

First of all, let me give an overview of info I found on the net. I will number them so I can refer to them further on.

1. [Specifying tax rates][1]
2. [Charging tax: Checkout shopping cart][2]
3. Within the CheckOut dashboard, one can set the taxes, using one of these settings

- Not charging taxes
You will not be charging your customers tax or will not be using these settings to charge tax.
- European Union: flat rate
All customers in the European Union will be charged the same tax rate.
- European Union Taxes: specifying by country
You select which European Union country you charge tax in and enter a flat tax rate for each country you select. (step 2 is to set this tax)
- European Union and Non-European Union Taxes (step 2 is to set the tax per country)
You select which countries you charge tax in and enter a flat tax rate for each country you select. (step 2 is to set this tax per country)


I have been contacting a qualified tax professional, who told me that

- The tax that is to be charged is the one that applies in the location the product or service has been charged from.
- Through the Android Market, Google sends an invoice on the developers behalf. Therefore the developer should shift the tax responsibility to Google, which in turn pays the tax to the government/authorities.
- In order to shift the tax, the developer needs Google's tax number and the invoices from Google, that shows the charges that have been sent to the customers.

So, to sum this up in a graphic

![enter image description here][3]

And now for the questions (referring to the links and image)

- When I look at an invoice that is sent to me after purchasing an app from the Android Market, it seems the address of the developer is shown, not Google's. So instead of location Y, address Y is address X. Does this mean the tax to be applied is the one of location X instead of the one that applies in location Y? As stated in (1) "You'll need to take steps to ensure your apps are sold with the proper tax for your location." This suggests the tax rate is tied to your location, which in my case would be Holland, not Google's location (Ireland/Luxembourg?). The same suggestion is made in (2) "You are solely responsible for specifying your own tax rates. If tax rates for your location change, you are also responsible for updating the tax rates buyers are charged."

- In the Checkout dashboard, one can set the tax settings (3). Now if the tax that is to be applied is the one the location the product or service has been charged from, why would you want to specify this per country?

- What is the reason for the European Union distinction, it suggests tax is only to be applied in this region, so not in the US for instance?

- Can one request the actual invoices concerning sales from Google? Or can the list downloadable through Checkout be used rightfully?

- What is / where can we find Google's tax number?

- Next to adding it to the selling price and specifying it on the invoice, does Google actually pay taxes to the authorities if you set taxes through the CheckOut dashboard?

- As far as I know, taxes are calculated from the price before the Google cut?

- Does this process make sense or am I totally wrong about this?

Knowing there are a lot of Android developers out here, I'm really curious about how you guys handle this?


  [1]: https://www.google.com/support/androidmarket/developer/bin/answer.py?hl=en&answer=138000
  [2]: https://checkout.google.com/support/sell/bin/answer.py?answer=73973
  [3]: http://i.stack.imgur.com/8Qq93.jpg
Selling Android apps and taxes
===

We are about to launch an Android app and while there is very little to no information to be found on the internet regarding taxes, I'm asking my questions here.

First of all, let me give an overview of info I found on the net. I will number them so I can refer to them further on.

1. [Specifying tax rates][1]
2. [Charging tax: Checkout shopping cart][2]
3. Within the CheckOut dashboard, one can set the taxes, using one of these settings

- Not charging taxes
You will not be charging your customers tax or will not be using these settings to charge tax.
- European Union: flat rate
All customers in the European Union will be charged the same tax rate.
- European Union Taxes: specifying by country
You select which European Union country you charge tax in and enter a flat tax rate for each country you select. (step 2 is to set this tax)
- European Union and Non-European Union Taxes (step 2 is to set the tax per country)
You select which countries you charge tax in and enter a flat tax rate for each country you select. (step 2 is to set this tax per country)


I have been contacting a qualified tax professional, who told me that

- The tax that is to be charged is the one that applies in the location the product or service has been charged from.
- Through the Android Market, Google sends an invoice on the developers behalf. Therefore the developer should shift the tax responsibility to Google, which in turn pays the tax to the government/authorities.
- In order to shift the tax, the developer needs Google's tax number and the invoices from Google, that shows the charges that have been sent to the customers.

So, to sum this up in a graphic

![enter image description here][3]

And now for the questions (referring to the links and image)

- When I look at an invoice that is sent to me after purchasing an app from the Android Market, it seems the address of the developer is shown, not Google's. So instead of location Y, address Y is address X. Does this mean the tax to be applied is the one of location X instead of the one that applies in location Y? As stated in (1) "You'll need to take steps to ensure your apps are sold with the proper tax for your location." This suggests the tax rate is tied to your location, which in my case would be Holland, not Google's location (Ireland/Luxembourg?). The same suggestion is made in (2) "You are solely responsible for specifying your own tax rates. If tax rates for your location change, you are also responsible for updating the tax rates buyers are charged."

- In the Checkout dashboard, one can set the tax settings (3). Now if the tax that is to be applied is the one the location the product or service has been charged from, why would you want to specify this per country?

- What is the reason for the European Union distinction, it suggests tax is only to be applied in this region, so not in the US for instance?

- Can one request the actual invoices concerning sales from Google? Or can the list downloadable through Checkout be used rightfully?

- What is / where can we find Google's tax number?

- Next to adding it to the selling price and specifying it on the invoice, does Google actually pay taxes to the authorities if you set taxes through the CheckOut dashboard?

- As far as I know, taxes are calculated from the price before the Google cut?

- Does this process make sense or am I totally wrong about this?

Knowing there are a lot of Android developers out here, I'm really curious about how you guys handle this?


  [1]: https://www.google.com/support/androidmarket/developer/bin/answer.py?hl=en&answer=138000
  [2]: https://checkout.google.com/support/sell/bin/answer.py?answer=73973
  [3]: http://i.stack.imgur.com/8Qq93.jpg