Another way to monetise your Android Apps instead of putting Ad banners is to make them as paid versions, or to provide upgradable features through In-App Purchase or subscription.
While End Users may not aware the money they paid is not all yours, as an App Owner it is always good to plan ahead how much you would actually earn, and how many paid users you will need to cover the given amount of development/operations cost. Otherwise, it will be sad enough after you spent an entire week’s effort trying to make your App pixel-perfect, but then you see the sales figure cannot even pay you back the cost of one pixel on your App’s UI.
- You may specify the local prices for all countries in their local currencies.
- Google can help auto convert the default price based on the exchange rates and tax rates, but that is a one-time action, meaning that the price are fixed after conversion until you update your pricing table again. You know the exchange rates fluctuate every day, but your local prices set will not follow that.
- You should carefully study the exchange rates and tax rates for the countries that your targeted users are located.
As of today, Google will be responsible for determining, charging, and remitting VAT for Google Play Store paid app and in-app purchases made in the countries listed below.
Google will send VAT for paid app and in-app purchases made by customers in these countries to the appropriate authority, so you won’t need to calculate and send VAT separately for these customers’ purchases. No action will be required on your part, and in addition to the original 30% processing fee, for applicable tax, Google handles it in two approaches:
- If the tax is listed as “incl.” on the Google Play Developer Console, users pay your listed price. Google charges you back 30% fees plus tax.
- Otherwise, users pay your listed price plus tax. Google charges you back 30% fees only.
This is exactly what you would see when you set up the pricing table on the Google Play Developer Console. However, the tricky point here is that, Google is not listing all countries that tax applies. For example, you see South Korea is not on the list above. When a user pays you from South Korea, the user will have to pay the extra tax on top of your proposed price. This is important to know when you set up your payment terms.
This is what we set on the Google Play Developer Console
This is what we see when someone made a purchase. That means the user actually paid more than what we have specified.
Conclusion
If you sell your Apps globally, it helps by keeping your pricing table updated, and also check your Google Payments Merchant Center for what you have actually earned for each transaction from different countries. You may need to set up your service terms carefully because not all your displayed local prices are VAT/taxes inclusive.
