google wallet tax
Monkey Archive Forums/Monkey Discussion/google wallet tax
| ||
| Hi, I'm french developper. I've already put a free app an google play store and now I wish to sell an app on google play store. When I must insert a price, I have 0% in tax form. I sell my app from France, do I need to insert all tax for all country in my wallet account or the tax will be automatically insert on phone client ? if someone could help me, it would be really nice :-) Regards. |
| ||
| You can do what you want. I'm from Germany and Ave all tax settings from all countries at zero. At the end I have to pay tax anyway for all of my income. |
| ||
| thank you very much, I'll do like that |
| ||
| I never really got what's that wallet tax thing is for. Ok here in Germany you can get back your sales tax when you BUY something. So if you have an app in the store with that tax thing I COULD get back that tax. I think it isn't worth all the effort. Not in that low price segment. ;) |
| ||
| Well I see it like this: In the US, we have sales tax at around 7% of the sales, or 7 cents per dollar. So if I sold a product at even $2, I'd lose 14 cents doing it by setting tax = 0%. Now, really, I agree its not much initially, BUT what if you sold 100 units of said product? Or a thousand units of the product? Now, you start mounding up the amount of taxes at a higher rate. 100 units @ $1 each = $7, @ $2 each = $14, @ $3 each = $21... @ $10 each = $70! Lets try that with 1000 units @ $1 each = $70, @ $2 each = $140, @ $3 each = $210... @ $10 each = $1000! On a small scale, its not much, but grow just a little bit and it adds up fast. Just remember that you will lose the taxes out of YOUR pocket if you do not collect it up front. Thats JUST TAXES. If you are in business to MAKE money, and thats the purpose of a business, thats definitely not money you want to just give away freely. You can easily use all the extra income. That's only the taxes part, don't forget you are also paying out fees to the vendor, so that's another 30-60% of your take - GONE!! That's depending upon whom your distributor is. Let's look at this now too: 1 unit sold @ $1 each with 30% taken for vendor fees = 70 cents, plus take the 7% sales tax from that as well (because you set it to 0, and the gov't wants their money) 70 - 7 = 63 cents in your pocket. This is just the simple math. Later you get nailed again for EARNINGS when you file taxes, so another 35% comes out. 63 x 35% = 22 cents in EARNINGS tax, so 63 - 22 = 41 cents left in your pocket. And... the earnings taxes go up with the more money you make; percentage-wise. Once you meet a given threshold of earnings, it will go up by 5%, so starting at 35%, then 40%, etc. This is just for demonstration of not collecting sales tax at the time of sales. Someone has to pay it, why should you? You go to the store and buy something. They tax you for it. That store generally will not pay the sales tax for you unless there is a special event going on. And even then, its a hard find to see any store pony up sales taxes for all its customers. Just think about it is all I am getting at. In the end its your money. :) |
| ||
| ^_^ Ok, it's good to have information. But for collecting sales tax from google play store, do you put 7% for all country in the world (the same tax rate you collect in your country) ? If yes no problem, I put my country tax. And this is not the same thing to raise the price to 7% (between sell the product $1 + 7%tax or sell the product $1 and 7cents) ? |
| ||
| You CAN do that too, but then the 1.07 also gets added to how much google takes from it and you still lose some money. So $1.07 x .30 = 32 cents, so you still pay 2 cents for EACH dollar in sales tax! At 60%, 1.07 x .60 = 64 cents, and now you are still paying 4 cents for each dollar! I'm not entirely sure how Google Wallet works for the country specific taxes. My guess (without researching this more) is that Google probably already bases it off the country you are doing business in. Anything outside where you are doing business, it removes the sales tax. Don't quote me on that, as that is my guess how they do it. I'd need to brush up on Google Wallet to be sure. Ok... So before I wrap up this post, I went ahead and located documentation about how taxes are handled in Google Wallet. Google Wallet - Specifying Tax Rates Also, more information: Google Wallet for digital goods |
| ||
| Well when I sell an app for $1 I get 0.70$ From these 0.70$ I have to pay income tax here in Germany, in my case about 30-40% When I add the sales tax of incredible 19% (yes it's that high in Germany!) I sell it for $1.19 and get $0,83. From these 0,83$ I have to pay income tax in Germany, so no matter what price I set, with or without tax I have to pay income tax. So for me in Germany it's simply the same. |
| ||
| That's right. You are correct that sales tax comes out regardless if you cover it or the person buying it covers it. You are still losing money on sales tax. YOU are paying out sales taxes even with $1.19 and getting back $0.83. Check this out: Your scenario is that you sell it for $1.19, and Google takes their cut of $0.36, leaving you with $0.83. Now you still need to cover the $0.19 sales tax AND the 30-40% INCOME tax. $0.83 - $0.19 = $0.64 and then you take out 30%. $0.64 x .30 = $0.19 INCOME tax, leaving you with $0.45 in YOUR wallet. Let's do the math with applying SALES tax in Google Wallet. You sell it for $1, and Google charges $0.19 in addition to the purchaser, then takes $0.30 leaving you with $0.70 + $0.19 = $0.89. You send off the $0.19 to sales tax. Its NOT part of your income, as its viewed as sales taxes. The $0.70 is view as your INCOME and you are then taxed 30-40% of that. $0.70 x .30 = $0.21, leaving you with $0.49 in YOUR wallet. This is only for $1! Imagine the amount you could add to your wallet? Tell me that $0.45 = $0.49? You lost $0.04 on that purchase for each dollar it sold for. Let's say your game sells well and it sells 10,000 copies. At this rate, 10,000 x $0.04 = $400 you lost to SALES TAX. Ouch. Thats only 10,000 copies. What if it really sold well like Minecraft? 12+ MILLION purchases? This is TOTAL sales on PC/Mac, but to prove my point. Hmm... just for grins: 12,000,000 x $0.04 = $480,000 in LOST SALES TAX that could have otherwise been in their pocket had they gathered the sales tax up front. I bet they charge it up front too. So, if you want to stomach losing money, go for not adding sales tax to your in-app purchases. I'm only trying to help you understand what you are missing by doing it that way. Make some money, and give only what you HAVE to give to the government. Pocket everything else :) |
| ||
| I understand more the way of collecting tax :) and I love my money ^_^ When I ask question to Google Play about tax, they answer "they are not able to provide tax advice" !!! So, I'll use your advice and will enter the tax. But I've have an other question : in the developper console, when I enter a price, I can only put a tax for a limited range of country (Mexico, Germany, France, ... the tax-inclusive pricing in the following countries I show in your link). I will have a difference between the sales and the sales tax. And it's not good I think, I'll pay tax for all country in my income. It is better that I add the tax for all countries in my wallet and I'll use my country tax ? |
| ||
| That is something you may need to consult your local tax office/representative about. You will only have income and no sales tax for those that purchase your products outside of your country. So this will be identified as INCOME tax and you will just be taxed that, not SALES. For those that purchase your products from in your country, then the SALS tax will apply and you will pay less INCOME tax. Brush up on how your country expects you to deal with sales and income taxes, especially when you sell outside your country. I wish I could give you better assistance with that. It seems that if you added the sales tax into the cost of the game for all non-French customers that you'd have some redemption on your taxed money, but it may hurt you that way too. This is why I say you should look further into how your country operates and expects you to deal with outside France sales and income. Good luck getting this worked out! |
| ||
| "When I add the sales tax of incredible 19% (yes it's that high in Germany!)" I wish it was that low in my country...22% VAT plus anything from 22% to 45% income tax... Anyway... From what i know it doesn't matter where you sell but where you are based. If i sell something in the UK but i am in Italy i have to pay the italian taxes..unless i have a subsidiary in the UK and i try to sell things through it. If i was you i would contact your tax office and ask them, but i am pretty sure you pay income tax and sale tax based on where your company (company or individual) reside, it's always been like that for me (and i traded with different countries in the past) although not in this business. |
   |