Client, whose normal business activity is something different to this, has developed something that might prove to be a money-spinner. Does anyone have advice or a link on VAT and any other tax issues surrounding the selling of Apps via Apple. Really want to check that I'm not missing anything beyond the bleedin' obvious. Thanks in advance.
Replies (5)
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Apple terms of service
There are some fairly comprehensive terms regarding collection of VAT in the terms of service which are agreed when a developer signs up to distribute an app through the app store.
This covers VAT and sales tax in any country where the app is available for distribution (as there may be liability outside the UK). In most cases, Apple will pay the tax on the developer's behalf (this includes the EU, US and Australia for example).
Your client will of course still need to consider his UK direct tax obligations.
Strictly speaking, there is a withholding tax when Apple pays your client his share of the sales revenue. However (assuming he is a UK resident), there is an online W8-BEN (to claim relief at source under the UK/US treaty) which he will have completed as part of the sign up process.
Robert Langston
Commissionaire
Under the terms of service, Apple are appointed by the developer as agent or commissionaire. For VAT purposes there is normally a separate invoice between principal (your client) and commissionaire (Apple) - which in this case I think would be a B2B supply (subject to reverse charge as Apple in Luxembourg do all of the EU distribution).
Quite how the paperwork operates (does your client need to raise an invoice to Apple?) I am not sure - but it may be set out in the terms of service somewhere.
Robert Langston
Sales
As Robert has mentioned previously, the agreement with Apple states that they will collect and remit sales tax in Canada, US, Australia etc.
Does anybody have any guidance on whether it is possible to rely solely on this or are there any circumstances where a UK company selling to Canada for example, solely through Apple, would also need to register itself for GST.
Thanks