About selling a game, taxes and legal questions. - Printable Version
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About selling a game, taxes and legal questions. - riruilo - Apr 20, 2009 06:40 AM
I finished my first (very simple) game and I'm going to upload it next week on the appstore.
My questions are:
Must I create a company to receive profits?
I'm in Spain, must I pay taxes here and in USA, or only in one place?
Is there any commercial agrement between our countries I should know?
(my game is only in English, I don't care too much about selling the game in my country as piracy levels are very high, even for 1 euro/dolar game)
In order to pay less taxes, what is best, a company or self-employed? (BTW, I created the game with a friend of mine)
Can anyone tell me some advice about these questions, please?
Thanks a lot for your help
About selling a game, taxes and legal questions. - saltwater - Apr 20, 2009 07:13 AM
By coincidence, I was having a look at the very same thing this morning and found this blog post from a guy in the netherlands (more or less the same situation than here in Spain):
About selling a game, taxes and legal questions. - Najdorf - Apr 20, 2009 08:08 AM
It's a mess in my opinion. If I'm not mistaken you are technically selling directly to the end user. However apple remits sales taxes for most countries (which makes no sense since its you that's selling).
It would be much easier if apple was selling and you just got the royalties, they do it this way to avoid being liable for your app.
About selling a game, taxes and legal questions. - Frank C. - Apr 20, 2009 11:36 AM
There's a lot of confusion 'cause software sales were shoehorned into iTunesConnect, and people keep spreading bad information...
For App sales, Apple sells the product and you get a commission (says so right in your contract). There are no royalties, and no US withholding taxes. If you're not in the US you don't have to register or deal with the IRS. Apple still wants you to fill out the IRS forms (which is dumb) but you can use nine zeros instead of registering an account with the IRS. Contact Apple if this worries you.
In some countries you might have to register for GST and fill out the appropriate forms to allow Apple to collect it on your behalf. And as far as I know, all non-Japanese developers need to fill out the Japanese forms on iTunesConnect to be exempt from a Japanese withholding tax (if you sell in Japan).
I don't know how VAT is handled so contact Apple if that affects you.
Once that's all straight, you just report your cut of the sales on your personal and/or company income tax return(s) and your government will decide what you owe them. You don't need a company but it may be advantageous to register one - you just need a bank account capable of receiving foreign wire transfers.
About selling a game, taxes and legal questions. - SethWillits - Apr 20, 2009 05:42 PM
International sales is so complicated. If you don't know what you don't even know, it's hard to find out what you need know! You know?
I hoped Apple would take care of everything for devs, but I guess not.
About selling a game, taxes and legal questions. - Oddity007 - Apr 20, 2009 06:38 PM
This is all so discouraging for me.
Being sub-20 it looks like it'll be hard to release anything without the financial aspect...
About selling a game, taxes and legal questions. - riruilo - Apr 28, 2009 12:55 PM
Thanks for replies.
Last question, what does "paid commercial agreement in place" mean?
From iphone_developer_program_user_guide__standard_program_v2.4.pdf I read:
"Before beginning the application submission process, it is critical that you read and review the distribution Terms and
Conditions. If your company has a legal department, it is recommended that you provide this document to them for review. If
you plan to sell your application, you need to have your paid commercial agreement in place, so that it can be posted to the
App Store. If not, your application will not be posted to the App Store until your commercial agreement is signed. If your
application is free, youâ€™ve already entered into the freeware distribution agreement by being accepted into the iPhone
Thanks for your time.