Post by redonihunter in Why does Itch add UK VAT at 20% to RPG books?

Viewing post in Why does Itch add UK VAT at 20% to RPG 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.

Like Reply

Karl Zylinski31 days ago (1 edit)

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.

Like Reply

redonihunter31 days ago

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.

Like Reply

Karl Zylinski31 days ago(+1)

You are completely correct. Sorry for all the confusion. I interpreted both the VAT help text and the numbers incorrectly. “collect by itch.io” does indeed use exclusive tax.

To anyone reading this: I WAS CONFUSED, PLEASE IGNORE ME.

Like Reply

redonihunter31 days ago

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.

Like Reply

discaddict31 days ago (3 edits)

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.

Like Reply

redonihunter31 days ago(+1)

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.

Like Reply

discaddict30 days ago (1 edit) (+1)

Yep, not a lawyer either so I've no idea how you square that circle. If it was physical goods it would "simply" be a case of not shipping to those territories.

In any case it's a secondary issue compared to actually charging and collecting the correct tax.

Like Reply