Apple App Store prices rise as VAT changes kick in and other shops likely to be hit

Changes are likely to lead to price adjustments at other retailers, including Amazon

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The Independent Tech

Prices in Apple’s App Store have risen sharply as a result of tax changes that could also hit prices at other retailers.

The minimum price of an app in Apple’s store has risen from £0.69 to £0.79. Apps that were priced at other price points have seen similar increases.

The change has also hit in the EU, where apps now start at €0.99.

Apple announced the changes to developers yesterday, saying that they were a result of changes to VAT rules and foreign exchange rates.

The change is likely to hit retailers including Amazon, too.

As a result of the new EU rules that came in at the beginning of the year, digital products will be charged VAT at the rate of the customer’s home country. For big digital suppliers that often base themselves in Luxembourg to benefit from lower tax rates, that could mean that the VAT charged will rise from 3 per cent to 20 per cent.

Though that increase will result in extra tax revenues for the treasury, it’s likely that the extra costs will be passed on to consumers and publishers.

Small businesses are also set to be hit by the rise.