I live in Turkey and tax rates are very high.
People are complaining about taxes by saying in Turkish “Halk, ağır vergiler altında eziliyordu.” which means in English “People were suffering from heavy taxes.”
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Apple Raising App Store Prices in Chile, Mexico, Saudi Arabia and Turkey Due to Tax Changes
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People are complaining about taxes by saying in Turkish “Halk, ağır vergiler altında eziliyordu.” which means in English “People were suffering from heavy taxes.”
There seems to be a general misunderstanding, maybe by the US readers, about what is and who actually pays the VAT.
In most of the world, where VAT is used, the tax is payed by the consumer, the person buying the good or service, the shop selling the good, not the company that makes the product, for example, a Best Buy store, a third party reseller, or the App Store in this case selling someones app, merely collect the tax on behalf of the Government from the buyers. They act as collectors of someone else money. Passing it on to the government in due time.
That money never belonged to Apple, it has nothing to do with Apple’s money or its income. Its not a tax on companies.
Hope this makes it a little more clear.
In most of the world, where VAT is used, the tax is payed by the consumer, the person buying the good or service, the shop selling the good, not the company that makes the product, for example, a Best Buy store, a third party reseller, or the App Store in this case selling someones app, merely collect the tax on behalf of the Government from the buyers. They act as collectors of someone else money. Passing it on to the government in due time.
That money never belonged to Apple, it has nothing to do with Apple’s money or its income. Its not a tax on companies.
Hope this makes it a little more clear.
It's a lot more than Sales Tax. It's tax that goes to a Health Care, Higher Education, Infrastructure, etc.
In the US we have just Sales Tax because Corporate taxes combined are paltry total to the entire collected taxes in the US. Sales Tax is the largest because so many people are in poverty it's just a pure consumption tax to them.
2018 US Corporate Tax Totals
https://www.pgpf.org/blog/2018/10/c...-down-by-nearly-one-third-in-fiscal-year-2018
2017 US Sales Tax Totals
https://www.statista.com/statistics/249137/us-state-and-local-sales-tax-revenue/
Note how in 2017 how far ahead Sales Tax was to Corporate Taxes. Then note the 2018 Corporate Totals plummet.
None of this happens in countries like Germany, France, Denmark, etc., with their VAT that covers Health, Education, Infrastructure, etc., year in and year out.
2019 Chart of Tax Revenues structured. Corporate Taxes are extremely low.
https://www.statista.com/statistics/216928/us-government-revenues-by-category/
People whine that they pay a larger percentage relative to population. Well duh. If there were 255 million corporations in the US [Number of tax paying adults estimate in 2020: Total population by child and adult populations in the United States ] Corporate Taxes would be reflective much higher in total taxes. Revoke the millions of non-taxable entities in the US and watch the Tax Revenues soar to pay for that Health Care, Higher Education, Infrastructure, etc.
If you suppose VAT stands for Very Aggressive Taxation then you’ve got the whole idea of what it is. It just means that your politicians want to get ahold of even more of your money and spend it freely as they see fit. Imagine if your teenager could just legally demand your credit card when they want. That’s VAT !!
Update: I think it’s hilarious that people are so pro VAT. Why not just start voluntarily donating extra money to your government?
Update: I think it’s hilarious that people are so pro VAT. Why not just start voluntarily donating extra money to your government?
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VAT and Sales Tax while conceptually different, are the same for the end customer.
If an item is sold for $100 w/ a 16% sales tax the customer pays $116.
If an item is sold for $100 w/ a 16% VAT the customer still pays $116.
Who collects and pays govt. is irrelevant. End customer gets charged the same whether it's Sales Tax or VAT.
Sounds like they are the same if the end customer does the math to see that the item marked as $100 is really $116. Only thing is in Europe the advertised price has to include the tax already. So the item will be marketed there as $116. Anyway, I don't think that has anything to do with it being called "VAT," I'm just going to consider them synonymous.
I think we need to return to paying only the advertised price. Sales taxes differ across cities, and they keep adding random other taxes that you don't see until you get the bill. Like "5% living wage tax to play our employees" in Mountain View and San Francisco. Cruises are marketed at half the actual price after "taxes and fees."
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It's not but it's somewhat related. Basically VAT uses a different concept that ultimately achieves the effect of a sales tax, but avoids various problems compared to a plain sales tax.
Why is the VAT administratively superior to a retail sales tax?
www.taxpolicycenter.org
They cannot be compared. A 16% plain sales tax would be so high as to be totally unrealistic and unenforceable, whereas a 16% VAT would be on the low end as VAT rates go.
The tax amount and structure is still the same, looks like the enforcement is just different. They can realistically enforce 16% VAT, but that doesn't make it lower than a 16% sales tax.
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The customer pays tax. If an app in Germany (one of the countries changed) is sold for €9.99, that's the price the end user sees; the real price was €8.39 + €1.60 VAT. The VAT has gone down, so Apple decides if the price stays at €9.99 but is now €8.61 + €1.38 VAT or the price gets changed to €8.99 = €7.75 + €1.24 VAT. Probably stays at €9.99, so Apple + developer get €0.22 more.
The developer can only choose one of 90 or so pricing levels which determines the price in all 150 countries, they can't change the price individually per country. In a country where a new 19% tax has been introduced, prices will most likely go up for the end user.
I don't really follow what you are trying to say. Why does it matter if Corporate tax receipts plummet? You tax a corporation, you are still taxing the consumer - it is ALWAYS passed along. This very posing we are all commenting on is the perfect example.
People whine that they pay because it never ends. One can cite all the "good things" it covers, but there is one thing for certain, government is not efficient at running ANYTHING.
Lastly, you can slice and dice it how ever you like, but the simple fact is that overall US tax revenue climbs steadily, including the years where Corporate "plummets".
VAT can be a complicated system depending on what country and the type of business your in, manufacturing, services or retail, import or export, all have to pay variable VAT rates. Our accountant would spend a full day at the tax office every month.
You get a nanny to take care of everything for you.
Either American, or clueless. Just go on the Apple website where they sell computers. Then go to the UK site, and you will see how every single price has VAT included. Go to Amazon.co.uk, and you will see how every single thing you can buy has VAT included. Go to any random store website, and you'll see how every little thing has VAT included.
If im not correct, if your outside of the US and download a app, the tax (VAT) is based not on your Apple account address in the US but the IP address to where the app is being downloaded from. So you would subject to the local VAT. Someone correct me if im wrong.
Ah, you didn't read the full article did you? Just commented on the title.
Read what I wrote again. Then come back and we’ll talk.
it‘s not about VAT. But about the digital tax. What‘s the idea about that?