Tax on games

bokkenspiel

I was wondering how much is the tax on games in Ireland. Is it like 20 or 30%?


Does anyone here actually know the exact figure because I'm struggling to find the answer on the internet. I don't even know is the tax is based on per sale or some other way.

megaten

Same as the vat on everything else I'd assume.

witnessmenow

bokkenspiel wrote: »

I was wondering how much is the tax on games in Ireland. Is it like 20 or 30%?


Does anyone here actually know the exact figure because I'm struggling to find the answer on the internet. I don't even know is the tax is based on per sale or some other way.

Are you talking about the tax on your income of game sales or the VAT paid on each copy as its bought?

VAT is probably standard 23% or whatever it is now.

Income on sales I'd imagine is the same as any income (I presume games are not considered art, although they should be)

Kilgore__Trout

Would anyone here have experience of releasing a game through

a) Own website using an order processor
b) Digital distributor: Steam, Gamersgate, etc

If so, any chance I can ask you a few questions : )

Daawaa

Kilgore__Trout wrote: »

Would anyone here have experience of releasing a game through

a) Own website using an order processor
b) Digital distributor: Steam, Gamersgate, etc

If so, any chance I can ask you a few questions : )

I would like to hear about this also. Its a fairly ambiguous area really and there's not much discussion on it (that I've found)

ChRoMe

Daawaa wrote: »

I would like to hear about this also. Its a fairly ambiguous area really and there's not much discussion on it (that I've found)

Steam imposes an NDA, however its generally accepted you should be expecting them to take 30%, if you are lucky enough to get on the platform.

If you aren't on Steam you don't exist (in pc games anyway).

Kilgore__Trout

I’ve been looking into ways of distributing my WIP, and thought I would share what I’ve learned so far.


Disclaimer: I can’t say for sure that everything is 100% accurate. Still putting the pieces of this puzzle together. Hopefully other, more experienced campaigners will pitch in to help improve the information.

If you are selling digital copies, in the eyes of the revenue commissioners you are selling a service, and the threshold for VAT registration is €37,500.

If you are selling physical copies (probably not viable if you are independent, you are selling a product, and the threshold is €75,000.

Effectively, when you cross this threshold, you must collect tax on your sales. However, if you are VAT registered (or not) and selling to a business outside Ireland (as opposed to a consumer), you do not have to charge them VAT, you aren’t paying VAT twice.

If we say, for convenience, that the final price of your game is €10.

123% = €10 (Includes VAT, the price the digital distributor or order processor will charge the customer)
100% = €8.13 (The price you will charge Steam, Gamersgate or an order processor)

From what I can tell, there are three basic options.


1) Sell through digital distributors

Selling through a digital distributor (Steam, Gamersgate, etc) would seem to be the easiest option in terms of admin, and assuming they are willing to distribute your game. Predictably, it also gives the lowest return. Standard split is 70% dev, 30% distributor.

So, you are charging them 8.13 a copy. They sell for 10, to cover their VAT obligations.
They take 30% (€2.43), you get (€5.70 – 57% of the final price)

2) Sell through an order processor


Gives a better return than a game distributor. There are a number of OPs bmt micro, the OP formerly known as Plimus, and fastspring (which charges 8.9%). They handle the transaction, the download, and sending out the cd key.

You charge them 8.13 a copy. They sell for 10, to cover their VAT obligations.
They take 8.9% (€0.72), you get (€7.41 – 74% of the final price)

3) Use paypal, or a similar service

Haven’t looked much into this, but it might be good for a company that hasn’t crossed the VAT threshold, (as OP and DD are obliged to charge VAT regardless).

My understanding (second hand) is that paypal is not good for selling large volumes. VAT starts to get complicated if you are selling large amounts to multiple countries, and you also have to configure paypal to handle access to download link, send an email with the cd key and so forth. In short, it seems like a lot of hassle. Still, AFAIK, it would allow you to keep 90% + of the final price.