Swedish government hits app developers with double VAT charges for EU distribution

Tax authorities in Sweden have started charging the country's app developers a value added tax rate of 25 percent on the apps they sell through thirdparty distributors.

This is on top of the tax charged by the EU on app store transactions. 

The new tax will be applied to any apps sold in the European Union, through mediums such as Facebook or Apple's App Store.

The Swedish tax powers argue that the developers are the sellers of the apps, not the thirdparty distributors, and are therefore obliged to pay twice, whereas EU taxes the transaction at the app stores.

Swedish fleece

Naturally Swedish app developers aren't happy about this as it puts them at a considerable disadvantage to the rest of the EU development community.

"We want Anders Borg [minister for finance] to put his foot down and decide that this should be an exception and that no Swedish VAT will be charged until the matter is investigated at EU level," said Per Strömbäck, spokesperson for the Swedish Games Industry, on Sveriges Radio.

"Why should Swedish companies get hit?" he asked.

Rules in the EU regarding taxation of electronic services are due for revision in 2015 according to website The Local.

[source: The Local]