Apple adjusts foreign App Store pricing to account for VAT changes

AppleInsider

Apple is in the process of sending out emails to inform developers of an App Store update that changes price of apps in six countries adjusted due to the addition of, or changes in, that country's value added tax.

According to Apple's email, a copy of which was seen by 9to5Mac, the company started to collect taxes on the sale of apps and in-app purchases from customers in Armenia, Belarus, Turkey, Saudi Arabia and United Arab Emirates on Jan. 1.

With the new policy in place, Apple is collecting and remitting taxes at a rate of 20 percent in Armenia and Belarus, 5 percent in Saudi Arabia and the United Arab Emirates, and 18 percent in Turkey. Due to a change in VAT code in Switzerland, Apple is charging customers a 7.7 percent fee, down from 8 percent.

Additionally, prices for apps and in-app purchases, excluding auto-renewable subscriptions, will decrease in the Czech Republic over the coming week. India will also see a decrease in prices over the same period, though auto-renewable subscriptions are included as part of the change. Prices are set to increase in Armenia, Belarus, Nigeria and Turkey, though auto-renewable subscription fees will remain the same.

Apple notes in its letter that developers can adjust subscription pricing at any time to preserve prices for existing customers.

Finally, Apple says App Store proceeds will be adjusted and calculated based on the new tax prices. Developers can check new prices in the Pricing and Availability section of My Apps in iTunes Connect.

Apple occasionally updates App Store pricing to account for foreign exchange rates, changes in local tax codes or other financial considerations. In May of 2017, the company increased prices in the European Union, a change that followed a similar increase to U.K. pricing that January as a result of the "Brexit" vote.

saarek

I wonder how quickly they’ll drop the U.K. pricing now that the pound is back to pre-brexit levels.

Probably not quickly, if at all.

darren mccoy

I suppose they have to wait a while to make sure its not temporary, otherwise we'd be getting price changes every week. I completely agree with you though. It's just like power and petrol companies, quick to go up, slow to go down.

MacPro

saarek said:

I wonder how quickly they’ll drop the U.K. pricing now that the pound is back to pre-brexit levels.

Probably not quickly, if at all.

These folks don't expect this to last sadly.  https://www.poundsterlinglive.com/usd/8365-pound-strength-vs-dollar-not-justified-capital-economics

macxpress

Bring on the whining about how much extra Apple charges versus the US. 

MplsP

macxpress said:

Bring on the whining about how much extra Apple charges versus the US. 

I think most people in Europe recognize the VAT and the increase it adds to the prices. The main difference in Europe is that the price shown for something generally includes the tax, unlike the US where prices listed are always pre-tax, making US prices seem artificially lower.

Not sure why this is a story - seems like it’s just Apple complying with tax laws in the respective countries.

crosslad

MplsP said:

macxpress said:

Bring on the whining about how much extra Apple charges versus the US. 

I think most people in Europe recognize the VAT and the increase it adds to the prices. The main difference in Europe is that the price shown for something generally includes the tax, unlike the US where prices listed are always pre-tax, making US prices seem artificially lower.

Not sure why this is a story - seems like it’s just Apple complying with tax laws in the respective countries.

An iPhone X is $999 dollars in the US not including the state tax. In the UK it is £999 including VAT of 20% making it £832.50 without VAT. Todays exchange rate is $1.41 to the £1.00 making the cost of an iPhone  in the UK $1,173.83.Therefore we are paying over 17% more in the UK for the iPhone than in the US. On top of that we pay 20% VAT which I believe is more than the sales tax in the US.