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How to set a default price for a Android in-app product for a non VAT registered company?

  • December 10, 2021
  • 1 reply
  • 451 views
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I noticed that setting a default price for a in-app product is not inclusive of tax. We are not VAT registered so we dont want to charge tax on our products. Does that mean I still need to set the default price inclusive of tax?

For example we sell an in-app product for £39.99, however if I put in £39.99 as the default price, then the price will be £47.99 for the user as Google automatically adds on the 20%. So I presume I need to set the default price to £33.33 which will equate to £39.99.

 

Does this mean that Google will withhold the 20% even though we are not VAT registered? Or will Google give us the full £39.99 and just take their 15% commission?

Best answer by cody

Hey @Walter Holohan!

I believe Google will take VAT from the price you select, if you are subject to VAT in the country it’s sold in. Google explains this here and provides examples: https://support.google.com/googleplay/android-developer/answer/138000?hl=en#zippy=%2Csee-an-example

Their example:

Assuming app price in country is 100JPY and VAT is 20%:

Developer receives from Google: 75JPY

Developer remits VAT: 17JPY

  • Example: 100JPY - (100JPY * 1/1.2) = 17JPY
  • App price - (App price * 1/(1+tax rate))

Developer revenue after 70/30 split and remitting VAT: 58JPY

  • Example: 83JPY * 0.7 = 58JPY
  • Pre-VAT price * 70%

 

I’d recommend following up with Google directly, though: https://support.google.com/googleplay/android-developer/gethelp

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cody
RevenueCat Staff
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  • cody
  • RevenueCat Staff
  • 497 replies
  • Answer
  • December 10, 2021

Hey @Walter Holohan!

I believe Google will take VAT from the price you select, if you are subject to VAT in the country it’s sold in. Google explains this here and provides examples: https://support.google.com/googleplay/android-developer/answer/138000?hl=en#zippy=%2Csee-an-example

Their example:

Assuming app price in country is 100JPY and VAT is 20%:

Developer receives from Google: 75JPY

Developer remits VAT: 17JPY

  • Example: 100JPY - (100JPY * 1/1.2) = 17JPY
  • App price - (App price * 1/(1+tax rate))

Developer revenue after 70/30 split and remitting VAT: 58JPY

  • Example: 83JPY * 0.7 = 58JPY
  • Pre-VAT price * 70%

 

I’d recommend following up with Google directly, though: https://support.google.com/googleplay/android-developer/gethelp

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