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I've just created an account to submit an application to the Ubuntu Software Centre and the agreement says: "You are responsible for determining applicable taxes in connection with distributing your App, and you shall pay applicable taxes to the applicable tax authorities.".

Does this mean that Canonical doesn't collect tax (especially VAT in the EU) and it's my responsibility to do it?

Also, am I wrong to assume that the price listed by the USC is the same for both people who pay taxes and for those who don't need to pay them?

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2 Answers 2

up vote 18 down vote accepted

Hopefully I can clarify the intent of the contract.

I believe there are two different taxes referred to in your question. There is VAT on the sale to the consumer; and income tax on the payment made to the developer. I'll cover them separately below:

Canoncial will collect UK VAT (currently 20%) from each sale and pay this to HMRC (the UK's tax authority). The sale price that the developer sets should be inclusive of this tax. VAT is not applicable on sales outside of the EU, but to keep the pricing simple and straightforward for the consumer, the one price has been set for both EU and non-EU customers. This means that the developer's margin will be larger for non-EU customers. The royalty statement sent to each developer will outline the EU versus Non-EU sales and detail any VAT deductions. This is covered in clause 4.2 of the developer agreement.

Clause 3.3, which says

"You are responsible for determining applicable taxes in connection with distributing your App, and you shall pay applicable taxes to the applicable tax authorities"

refers to the income tax that is payable by the developer to the tax authorities where they are a tax resident. This means that the developer needs to declare their income (the net payment made by Canonical to the developer) and pay the applicable income tax in their own country.

I hope this provides some further clarity, but if there's any other questions please let me know.

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It does, thanks! Do you have plans to change the pricing to allow developers to specify a price without VAT? I assume you know where each user is located and can determine if they need to pay VAT or not. –  Nicu Oct 24 '11 at 17:55
    
By the way, I didn't save the developer agreement when I accepted it and now I don't know where to find it. I expected to find it in the My Apps section but it's not there. Can you help? –  Nicu Oct 24 '11 at 18:03
    
can you also answer the other two questions I asked in the above comments? –  Nicu Oct 28 '11 at 5:43

I think it means that you should declare your income in accordance with the law of your contry. And pay all applicable taxes, such as Tax on income of an individual.

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