Digital selling goods application on Google play store authorized to pay 30% tax

Recently Google announced that it will be suppressing on a loophole that will authorize apps that sells digital goods to pay 30% tax as apps like Spotify and Netflix generally ask the users to enter credit card information and prompting them to pay directly for getting subscriptions, but now, in this case, Google applies its policy that says that all in-app purchases involving digital goods will have to make payment via Google’s billing system.

However, this policy does not apply to companies that sell physical goods like Myntra, Amazon, and so on, though other developers still have another year before complying with the new rules and, new apps must use Google’s payments tool for sales by 20 Jan while existing apps have until Sept. 30, 2021. Google mentioned to give relax to the company’s who has shifted to selling digital items from physical goods and services because of the coronavirus pandemic may get additional time to comply.

The argument regarding this policy is that a 30% tax is too high for what is essentially Android security and a digital storefront. Tax is forcing all the developers to pay and in reality, it’s a home for most of the digital storefront. As an Android user, it has no other alternative option hence they are compelling developers to pay 30% tax.

App stores are a fast flourishing business as sales of Google’s search ads and Apple’s iPhone leveling out but this decision came out from Google when a fight occurred between Apple and developers on a small tax on the Apple store.

Further Google’s vice president for product management Samat said, that apps allow only ios device to use its apple store but Google allows users to access apps from places other than the official play store.

Google mentioned under 3% of developers with apps on its Play store sold digital goods over the last 12 months, and nearly 97% comply with its payment system policy whereas Apps have said 30% is excessive compared with the 2% fees of typical credit card payments processors.

Dating apps maker Match Group Inc is among the companies that have publicly said they do not pay Google’s 30% fee, which decreases to 15% in upcoming years if it is for a subscription assistance, and Epic game is launcher is currently soliciting both Apple and Google over their fees.

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