Note that that’s EU VAT. VAT is added on checkout on Itch, unlike any ordinary income tax. There is possibly US income tax being withheld on purchases, but that depends on your countries tax treaty with the US. Income tax would be included in the price.
Chickensoft
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Is there a way to handle VAT for other regions than the EU without using the Direct to you payment option?
Specifically Norway has similar rules as the EU, where companies selling for more than 50.000 NOK in any 12 month period, have to collect VAT for all sales surpassing those first 50.000. This happens to apply to foreign companies as well. This is approximately $5.000 USD.
AFAIK, Australia and New Zealand have similar rules, although their limits are much higher, and their GST/VAT much lower than that of Norway.
In particular, consumers should also be informed of what part of a purchase is VAT and what is the sub-total on their receipt/invoice.
I understand that Direct to you would enable me as a creator to handle the VAT myself, but my guess is Itch.io has sales great enough to be required to handle VAT in these regions as well.