Publishing first game Steam and Taxes

News & General Discussion
1

Hello, have any of you published games on steam or are able to answer the tax questions?
Correct me if I’m wrong, but info is pretty confusing out there and I read the following if you publish a game on steam,

  1. You pay 20% VAT Tax
  2. You pay 30% Cut to Steam
  3. You Pay another 30% tax to US’ IRS Withholding tax
  4. Then you pay tax in your own country, which could be about 15% in my case.
    This is 95% freaking taxes and if you are lucky, you won’t go in debt, eh?. This is crazy.
2

You are right about that, ok let’s say we have 100 dollars income.
We take out 20% VAT, then we have 80 dollars.
We take out 30% Steam cut, we have 56 dollars left.
We give 30% to IRS, we have 39.2 dollars left.
Then we give 15% to my country. We have about 33 dollars left.
That is a bit better, but still is only 1/3rd of the total money the customers paid. And that is without substracting any money you actually paid for producing the game :smile: I feel like taxes eat way too much.

3

Hmm, wait, are you sure you gotta pay those 30% to the IRS? There are so called tax-treaties with many many countries since most countries try to avoid that double-taxation because it goes both ways:

Steam provides this link to the IRS, but unfortunately hasn’t bothered to summerize the information.
https://partner.steamgames.com/doc/finance/taxfaq#:~:text=A-to-Z-,Q.,these taxes to the IRS.

I feel if the 30% were typical, Steam would effectively be not viable for non-americans.

Still you are right and it’s silly how people worried about 4% going to Unity in comparison to taxes and store-fees (retroactively or not; it remains silly)…

P.s. you can also sell on the Epic store which charges only 12% for the foreseeable future.

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4

Yeah, apparently you have to do " Tax interview" and they will decide if your IRS tax will be 30% or lower, but I haven’t done that yet. (Upon further check, it could be 5%~10% for my country, which is Bulgaria)
Good idea for suggesting Epic store. 30% compared to 12% is quite a lot.

I was wondering if any of those taxes are mutually exclusive.

5

Eliminate 2) because that’s not tax but Steam’s revenue share everyone has to hand over. Eliminate 1) as well because that’s something your potential players will have to pay when they buy your game.

Generally speaking, I would - if I was you - consult a lawyer. None of us here are ones, thus everything we say is not meant as a legal advice.
.

6

Hi! Watch this video about freelancing and taxes in Bulgaria, probably it will be useful for you:

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