From a Windows Developer email:

Russia will become a Microsoft remittance country where Microsoft (or its billing service provider) will collect and remit the VAT on behalf of developers. Effective January 1, 2017, Microsoft will determine the VAT due, withhold such VAT from your App Proceeds, and remit directly to the Russia tax authorities. The current VAT rate in Russia is 18%.

You know, when you give an app store (iOS, macOS, Windows) 30% of your take, you actually tend to get a lot.

  • Free licensing
  • Free update mechanisms
  • Free downloads
  • A pretty reliable landing page
  • Free payment processing
  • Limited marketing

That's not bad.

The question's not even, "Is that worth 30% of my revenue?" for many (most?) developers. The question is, "Is 30% too much to give up to release my app before I could have all of this other stuff ready?"

If you could release at Day 0 instead of Day 250, and 70% of the lost sales from 0-250 would make up more than 30% of all sales, then you're an idiot not to release with in an app store as quickly as you can.

What the store buys you is a reduction in time to market. Use that.

What it also buys you is more markets. There's no way I could keep track of VATs and taxes for every country, especially when these countries don't make up much of my user base. Microsoft is big enough that it's worth it to them, as part of the 30% they take from us, to make changes like this VAT charge.

Course it stinks. I'm now getting 70% * 82% = 57.4% of my list price in Russia. Ouch. I could make the price higher to cover the VAT, but for the sales I have there, I probably won't bother.

As Joel says, it's all about barriers to entry. Such a protective tariff should make foreign software more expensive in Russia. I wonder to what extent it does.

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