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Taxes are removed from the price, not added to the price of games.

Posted by Protektor on May 16th, 2012

One thing developers need to keep in mind when they are setting prices for Australia and Europe is that taxes are take out from the price you list for your game in those areas. If you are listing a game for $9.99 in Australia you will not get 70% of $9.99. Taxes will be removed from the $9.99 and then you will get 70% of the amount after taxes are taken out. You would end up with $8.99 then 70% of that. The same thing is true in Europe with the VAT tax.

This is something you should keep in mind when pricing your games so that you are not surprised by the amount that you are paid. If you want, for example, 70% of $9.99 (US Dollars) from all countries then you will need to charge more than just the exchange rate equivalent of $9.99. You should also keep in mind that all prices must end in .99.

You will find that most of the big publishers are aware of this and factor their prices accordingly such as:
$9.99, $10.99 AU, €9.99, £8.99

It may seem like you are charging more for those in Europe but taxes have to be removed then you get 70% of the amount after taxes. A price based only on the currency exchange rate will mean that you will get less for sales in Europe and Australia in US Dollars because of taxes.

Australia Tax Rate: 10%
Europe VAT: 15%-28% (Usually 20%-22%)

Post comment Comments
AlexVSharp
AlexVSharp May 16 2012, 7:21pm says:

Uhm... out of curiosity: What's the reasoning behind prices ending with .99? I know this was/is used in retail stored for various reasons, like separating discounted, on-sale products from the rest, or even as a psychological illusion that something is cheaper since our brain is much quicker to register a $14(.99) than $15.00, but I don't quite understand this requirement of it being like that here on Desura. Could you please explain that?

+6 votes     reply to comment
HumbleLinux
HumbleLinux May 17 2012, 4:57pm says:

It should be up to each particular person to decide if he pays the tax or not. The consequences should be his thing also.

+1 vote     reply to comment
Protektor Author
Protektor Aug 20 2012, 3:29am says:

Since Desura is collecting the money and actually doing the sale it is Desura who has to pay the taxes. There is no choice in the matter if we want to sell in those regions.

The reason for the .99 is that we started out that way and want to keep everything uniform on the system.

+3 votes   reply to comment
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