Taxation

Community Marketplace
1

I have some doubts as to how taxation works for the Unreal Market, especially for international sellers. I could ask directly to Epic but thought that having a public response would be more interesting for the community.

So as I understand the tax breakdown is somewhat like this:

Asset Value: 100% (the value show in the marketplace listing)
VAT (Value Added Tax): varies but internationally around 20% - some countries demand that it is computed in the price before, others that it is added at checkout.
Epic’s Cut: 30% of the post VAT value
Tax Withhold: from 0% to 30% depending if your country has double taxation agreement with Switzerland (Epic’s home)
Bank transfer fees and currency conversion fees: can vary a lot.
Local taxes: according to your country’s regulation.
Epic Royalties (5%?): Do you pay Epic’s royalties for assets sold (not games)?

Example:

  • 100% - VAT (eg. 20%) = 100% * 80% = 80%
  • Epic’s Cut (30%) = 70%* 80% = 56%
  • Tax Withhold (eg. 30%) = 70% * 56% = 39.2%
  • Transfer/Conversion fees (eg. 7%) = 93% * 39.2% = 36.45%
  • Local Taxes (eg. 15%) = 85% * 36.45% * 30.98%
  • Epic Royalties (5%?) = 30.98% - 5% = 25.98%

So a 10 USD item pays the seller 2.58 USD, in this example.

Can someone confirm if it is somewhere close to this?

2

You do not pay Epic 5% royalties. I am not sure about the taxes.I am in the US and they don’t pull out taxes here.

3

First of all, I’ll have to disclaim that I am not an Epic employee, and that the content of this message could be 100% incorrect…but this is what I believe to be the way it works:
Epic, (usually) handles the buyer’s VAT, this means they’ll take you base price, and add however much VAT the buyer needs, in my case this is ~21%. This means that assets will be more expensive than their base price in my country. Then you are correct about the marketplace cut, Epic takes 30% of the item’s base price(?) as a fee to cover the expenses they make with the marketplace. I am unsure about the Tax Withhold, this is probably dependent on your local jurisdiction. The transfer/conversion fees will depend on your currency/method of payment, the marketplace pays you in USD, and offers you the option to use a bank transfer & paypal (I opted for paypal due to the high charge of banks, I believe paypal may take 3.6%, but am unsure about this). Your local taxes, again, are dependent on where you live, and you will have to consult your local tax service for more information about this. As for the 5% epic royalty, it isn’t existent for the marketplace when writing this message. I’m pretty sure you should be able to find this in the FAQ/EULA.

I hope this helps, again, please keep in mind that I am not an Epic employee, and cannot guarentee the accuracy of the content. I hope this helps you nonetheless :slight_smile:

4

Thanks for your responses!
Just one thing: I believe some countries demand that VAT is included in the price listing not just added afterwards. Anyway, we should be aware of all taxes even if we don’t ‘see’ then.