Post news Report RSS Pricing & Taxes

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

Posted by on

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 - - 215 comments

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?

Reply Good karma Bad karma+6 votes
HumbleLinux
HumbleLinux - - 167 comments

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

Reply Good karma Bad karma+1 vote
Protektor Author
Protektor - - 264 comments

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.

Reply Good karma+3 votes
Post a comment

Your comment will be anonymous unless you join the community. Or sign in with your social account: