Apple Passes Digital, Value-Added Tax Increases On To Developers

Apple has announced it will raise charges for developers selling on the local App Stores in a variety of countries to pay for the upcoming taxes and increase in foreign exchange rates.

Prices of apps and in-app purchases — excluding auto-renewable subscriptions — on the App Store will increase in response to tax changes in Chile, Mexico, Saudi Arabia, and Turkey. Proceeds will automatically be adjusted and calculated based on the tax-exclusive price.

Chile will see a 19% value added tax increase. Mexico will see a 16% value added tax increase. Saudi Arabia will see a value added tax increase from 5% to 15%. Turkey will see a digital services tax of 7.5% in addition to the existing value-added tax of 18%.

Apple, which published updated price tier charts, said proceeds also will be adjusted in Germany, France, Italy, and the United Kingdom, and will be calculated based on the tax-exclusive price. However, prices on the App Store will not change.

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It is also becoming more costly to do business in a European country. France will see a new digital services tax of 3% in addition to the existing value-added tax of 20%. In Italy, the new digital tax will increase costs by 3% in addition to the existing value-added tax of 22%. The United Kingdom will see a digital services tax of 2% in addition to the existing value-added tax of 20%.

Developers in Germany, however, should have seen a reduced value-added tax rate from 19% to 16%, which went into effective July 2020.

The news from Apple comes as Google announced similar increases. Google send an email on Tuesday to advertisers alerting them they would see a digital tax increase when using Google Ads in the United Kingdom, Austria and Turkey. The fees would appear on their monthly advertising invoice beginning November 1.

Amazon was the first to pass on the U.K. digital tax to sellers in August, whereas eBay said it would not pass on the tax increase.

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