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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%)