Apple switching to per-country VAT across App Stores in Europe

iOS 7 (App Store teaser 004)

Apple is changing its pricing scheme across European App Stores, switching from the previously same VAT rate it imposed across the entire European Union to a country-specific model, iMore reported.

Apps European customers purchase on their local App Store previously had an Irish 22 percent VAT on them. With this change taking effect soon, Apple will be now calculating app prices based on whatever VAT is used in each customer’s home country.

According to an email Apple sent to its registered developers, value-added tax (VAT) rates for apps “will change for all territories in the European Union,“ beginning January 1, 2014.

“VAT will be based on the customer’s country of residence instead of being the same across all EU territories,” the message continues.

Developer’s proceeds will be calculated after VAT is deducted, the company confirmed. While the tax change shouldn’t affect most European customers, those whose countries impose a higher tax rate than the 22 percent VAT previously used may see app prices increase as a result.

The change comes amid Apple’s fight with The European Commission over using a favorable Irish tax rate to funnel revenues and earnings to Ireland. Apple also announced earlier this week that that it’s halting sales on its Online Store in Russia amid “extreme” ruble fluctuations.