Uhm. Why are you losing 2-4 $ on an EU sale?
Pricing is US based and that means they are displayed without taxes. If you ask for 20 $ and a customer from the EU pays, there will be VAT added to that 20 $, not deducted from the price you asked. So that customer would pay 24 for your 20 $ item if vat is 20%. It is called value added tax for a reason.
Or am I missing something here?
The price shown is always including VAT. So if I put $20 then everybody pays $20. If there is VAT involved then I get less. People expect prices with VAT included, so that’s good. If it was not included and it said +20% instead of roughly +5% (as it should be for a book), then less people would buy it.
In any case, the problem is that a VAT of 20-25% is used instead of a VAT around 5%. It’s using the VAT % for video games, not the one for books.
The price shown is always including VAT
This is not true. Prices usually are VAT excluded. As is customary on a US based website.
https://itch.io/docs/creators/payments#vat-support
Calculate the VAT rate to collect based on the buyer’s location, and optionally bill it on top of the base item price (exclusive). This option can be disabled to have inclusive VAT pricing.
Did you activate vat inclusive pricing? That is nice of you, I guess. If only you could ensure all your competitors would do the same.
But till Itch implements features to adress special vat rates, the key issues is as I explained: your customers are not buying your book, they buy access to your project page's downloadabe files. If you upload example programs to go along with your programming book, then what? How would that affect taxes?
People expect prices with VAT included
People in the EU shopping on a EU site do that, because it is the law. People shopping on a US site and know that they shop in the US, do not.
You can only do “VAT exclusive” if you choose “direct to you” payout method. I use “collect by itch, payout later”. With that option VAT is always included. I can’t use “direct to you” since I then have to do all that book-keeping of every single european who buys my stuff myself. One of the main reasons for using something like Itch is that they can handle these VAT things towards EU. But in that case it’s also important that the correct VAT percentage is deducted.
You can only do “VAT exclusive” if you choose “direct to you” payout method. I use “collect by itch, payout later”. With that option VAT is always included.
Please double check this.
Because it ain't what my purchase mails say with Itch as the merchant. All of those have taxes added, so vat was exclusive and not included in the display price.
Oh, it does read like you can activate taxes included. But in my experience, no one does this. Steam game prices for the US market are also taxes exclusive. Players are expecting it. But EU players rarly buy directly from Steam USA. They get regional pricing and if offered in the EU market, prices have to have taxes included when displayed to the customer.
You are not allowed to advertise consumer goods for sale to buyers in the UK or the EU without VAT included at the correct rate. The correct rate of VAT for books in the UK is zero.
BTW it doesn't matter where the site is, if you ship to the UK or EU you must display your prices inclusive of VAT at the correct rate at the point where the goods are displayed.
What you say is technically correct, but not applicable. Applicable law, including consumer protection laws, for this site is Californian law.
And those end user price tags that must include taxes are of the consumer protecion variety. This is of course my opinion and I am not a lawyer, but I would be very surprised, if I were wrong here.
