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VAT treatment of mobile apps sold through Play Store and App Store

  • 13-07-2016 8:13pm
    #1
    HeinekenTicket
    Registered Users, Registered Users 2 Posts: 146 ✭✭


    We are a small VAT-registered company selling mobile apps to EU customers through Google Play Store and the Apple App store. I am trying to get some clarity on correct VAT treatment.

    As I understand it, the VAT element of apps sold in the EU through the Play and App stores are taken care of directly by Google and Apple, i.e., they collect and send the VAT to the relevant authority on our behalf to save us having to register for VAT in every EU country. We receive the net of VAT and net of commission amounts from Google and Apple.

    My question is: from our perspective, how do we treat the VAT element of these sales in our accounts and in our VAT returns? Effectively, we are selling B2B (i.e, to Google and Apple). Do we therefore account for the VAT on these sales as zero-rated, reverse charge, something else?

    I have reviewed the revenue.ie site for guidance but they don't have anything that I could find that is specific to the situation of selling apps via the Google and Apple platforms.

    I'd be thankful to receive an explanation or a pointer to an authoritative source.


Comments

  • #2
    dbran
    Registered Users, Registered Users 2 Posts: 2,094 ✭✭✭dbran


    Hi Heiniken Ticket

    I think the position is described below.

    6.4 What is meant by ‘explicitly indicated as the supplier’?

    If you are taking part in the supply and –

    you authorise the charge to the customer in respect of the supply,
    you authorise the delivery of the supply to the customer, or
    you set the terms and conditions of the supply
    you have, or are presumed to have, received and supplied that service in your own name and you cannot explicitly indicate another person in the chain as the supplier. You are accountable for the VAT on the supply to your customer.

    However, if you do not carry out any of the actions listed at (a), (b) and (c) above and both the service and the actual supplier of the service are explicitly indicated on each invoice issued in the supply chain and on the bill or receipt issued or made available to the final customer, the presumption that you have received and supplied the service in your own name can be overridden. Where that is the case, you will not be regarded as a principal and will, therefore not be obliged to account for the VAT in relation to the supply of that service. It is important to note that the economic reality of the transaction prevails and each transaction should be assessed individually to correctly identify the VAT treatment.

    http://www.revenue.ie/en/tax/vat/leaflets/place-supply-rules.html#section6

    So my understanding is you simply zero rate the supply if google or apple are responsible for collecting the VAT and remitting it to the relevant native tax authority.

    Dbran


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