👉 VAT is included in the price

The price you see on the Steam store page already includes the VAT applicable in the player’s region. 

👉 Steam collects and remits VAT

Steam acts as the seller and is responsible for collecting the VAT from the end customer and then paying it over to the appropriate tax authorities in the various countries. 

👉 Developers don't need to register for VAT in multiple countries

As a result of Steam handling the tax collection, developers typically don't need to register for VAT separately for their sales on Steam. 

👉 Steam is the merchant of record

When you sell through Steam, Steam is the merchant of record. They’re the ones collecting the money, issuing invoices to players, and handling all the VAT in each country.

This means that you’re not the one making the retail sale. Instead, you’re effectively receiving a royalty or commission payment from Steam after their fees and any withholding tax.

🤔 Thinking of cutting out platforms and moving to direct sales?

If you’re considering moving to direct sales (like downloads from your own website), you’ll likely have to adopt the VAT One Stop Shop ("OSS") scheme. This can get complicated so make sure you take advice before you go down this path.

If you have any questions about this, or how to post Steam revenue and fees in Xero, feel free to drop me a message or head over to www.urbanledgers.co.uk.

#VGTR #VGEC #VideoGames #TaxRelief #VideoGamesAccounting #VideoGamesTax