Warning - long, accounting related post follows. First of all, I'd like to say that I am consulting with an accountant on this issue but I thought it would be useful to see how other UK VAT-registered devs are handling this and whether I'm interpreting the rules as more complex than they need to be. Here's what I know, based on the iPhone developer agreement and the related schedules: * In the UK, the EU and most of Asia, Apple act as my "commissionaire" or, in other words, an "undisclosed agent" as HMRC refer to them. This means they are an agent acting on my behalf but in their own name. * In the US, Canada, Australasia and South America, they are my "agent". I'm not certain if this is an "agent" in the way that HMRC defines them (i.e. a disclosed agent) or some other legal term relating to those jurisdictions. * In the territories that would usually, or could fall under the scope of UK VAT rules (i.e. the UK and the EU), Apple state that they collect and remit VAT or other relevant sales taxes. As a Limited Company on the VAT Flat Rate Scheme, I would usually charge VAT for the provision of goods and services unless outside of the scope of UK VAT (i.e. services where the place of supply is deemed outside of the EU). Anything that is outside of the scope of UK VAT is not deemed part of my flat-rate turnover and I do not pay any flat-rate VAT on that income. On any goods and services where I *do* charge VAT (or, it is zero-rated), that income would form part of my taxable turnover and I would pay the flat-rate on it (even if it was zero-rated). Here's where the confusion begins. First of all, would an iPhone app be considered a good or a service? My interpretation of the HMRC rules would seem to indicate that "downloadable, non-custom software" is an "electronically-supplied service" and when supplied to another *business*, is outside of the scope of UK VAT. When charged to a consumer, VAT applies. Then there are special rules for "intermediaries" such as agents, disclosed or otherwise. It seems that for the purposes of VAT, a sale is considered as a supply by Apple to the end-user. Does that mean I don't charge VAT to Apple for the supply of my app to them? Its not really clear. To put it more simply: how do I account for my iPhone sales. Do I raise a non-VAT invoice internally (one for each territory) for the ex-VAT rate charged to the end-user x number of sales and then consider the payments from Apple as remittance of those invoices in full, less Apple's commission (i.e. a cost of sale)? Is this all outside of the scope of VAT therefore I don't have to pay the flat-rate VAT on the money I receive from Apple? Lots of confusion, lots of questions, I'd appreciate any insight from any other VAT-registered devs.