Digital games set to get charged VAT in 2015

A tax loophole that’s allowed gamers to avoid UK VAT charges is set to be closed on the 1st of January 2015.

The Guardian originally broke the story that George Osborne’s new budget would apply a 20% VAT tax to digital downloads. What they forgot to mention in their article, however, is that online digital distribution services for games will also be effected by this.

This will increase the prices of digital downloads on Steam, GOG, Origin, Amazon, Uplay and many more. It’s unknown of yet if this move will effect Sony, Microsoft and Nintendo’s console marketplace.

This closes the loophole where digital consumers pay tax to the country the service is based in. For Amazon, Steam, Origin and many other that is currently Luxenbourg. The changes will make the tax apply to the country the consumer is in, therefore VAT will be applied at 20% from next year. Valve, for example, already charge 15% VAT on all of their games to customers in the EU.

Digital distribution services have kept quiet as of yet, but news is expected soon regarding how they’ll deal with these changes.

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