Tax details for commercial marketplace publishers

Appropriate roles: Global admin

This page sets out the tax responsibilities and tax considerations for Commercial Marketplace Publishers (Publishers) and Consumer Marketplace Developers (Developers) in connection with end customer purchases of Publisher/Developer products pursuant to the Microsoft Azure Marketplace Publisher Agreement and the App Developer Agreement, respectively. The information below is in addition to, and not intended to replace, the terms and conditions in the Microsoft Publisher Agreement and the App Developer Agreement. Unless otherwise noted, the information below applies to both Commercial Marketplace Publishers and Consumer Marketplace Developers that make their products/offers available for sale through Microsoft Marketplaces.

End Customer Taxation

Each of Microsoft's and Publishers'/Developers' responsibilities for sales, use, goods and services, value added or similar taxes, if any, on end customer sales (End Customer Taxation) depends on the country in which Publishers/Developers elect to make products/offers available for sale to end customers through the Microsoft Marketplace(s). The table below sets out circumstances and responsibility for End Customer Taxation in countries with sales eligible through Microsoft Marketplace(s). The information below is subject to change, and Publishers/Developers are responsible for reviewing this page for current, accurate information.

In Publisher/Developer-managed countries, Microsoft acts as an agent or commissionaire (as applicable) of Publisher/Developer. Publishers/Developers acknowledge and agree that Publishers/Developers have sole responsibility to determine all compliance required for, and to manage, End Customer Taxation, including but not limited to registration, tax calculation, tax collection, tax remittance, validation of business status of customers and providing tax invoices to customers. Publishers/Developers acknowledge that, with respect to any sale in a Publisher/Developer Managed Country, Microsoft currently may not be able to provide the transaction details required for Publishers/Developers to provide customers with tax invoices.

In Microsoft-managed countries, Microsoft acts as an Agent of the Publisher/Developer. Microsoft assumes responsibility for managing End Customer Taxation, including calculating, collecting and/or remitting certain taxes. For Commercial Marketplace, this may also include validating the business status of end customers by obtaining tax registration numbers or exemption certificates. Microsoft manages End Customer Taxation through either local affiliates or remote affiliates that are registered locally. Microsoft invoices under Microsoft’s registration number. Microsoft includes any taxes collected from end customers on Microsoft’s tax return.

Microsoft makes no warranties that Microsoft’s actions will completely satisfy Publisher/Developer obligations in Microsoft-managed countries. For all Microsoft-managed countries, Microsoft strongly recommends Publishers/Developers work with their own tax advisors to ascertain whether Microsoft-managed tax remittance sufficiently addresses Publishers’/Developers’ compliance requirements. This is particularly critical for any Microsoft-managed countries from which Publishers/Developers sell their products/offers. Microsoft acts as an agent of Publisher/Developer in Microsoft-managed countries.

In Reseller countries, Microsoft acts as a reseller, rather than as Publisher/Developer’s agent, in making Publisher/Developer products/offers available for sale to end customers through the Microsoft Marketplace(s). Publishers/Developers are responsible for sales, use, goods and services, value added or similar taxes, if any, on the sale of products/offers to Microsoft, and Microsoft is responsible for all End Customer Taxation on the resale to end customers.

Publisher/Developer-managed countries:

Countries Countries (cont.) Countries (cont.) Countries (cont.)
Afghanistan
Albania
Algeria
American Samoa
Andorra
Angola
Anguilla
Antarctica
Argentina
Antigua & Barbuda
Aruba
Azerbaijan
Bangladesh
Barbados
Belize
Benin
Bermuda
Bhutan
Bolivia
Bonaire
Bosnia and Herzegovina
Botswana
Bouvet Island
British Virgin Islands
Brunei
Bulgaria
Burkina Faso
Burundi
Cabo Verde
Cambodia
Cameroon
Cayman Islands
Central African Republic
Chad
Christmas Island
Cocos (Keeling) Islands
Comoros
Congo
Congo (DRC)
Cook Islands
Costa Rica
Cote d'Ivore
Curacao
Dübouti
Dominica
Dominican Republic
Ecuador
Egypt
El Salvador
Equatorial Guinea
Eritrea
Ethiopia
Falkland Islands
Faroe Islands
Fiji
Gabon
Ghana
Georgia
Gibraltar
Greenland
Grenada
Guadeloupe
Guam
Guatemala
Guernsey
Guinea
Guinea-Bissau
Guyana
Haiti
Heard Island and McDonald Islands
Honduras
Hong Kong SAR
Iraq
Israel
Jamaica
Japan
Jersey
Jordan
Kazakhstan
Kenya
Kiribati
Kuwait
Kyrgyzstan
Laos
Lebanon
Lesotho
Liberia
Libya
Macao
Madagascar
Malawi
Maldives
Mali
Marshall Islands
Martinique
Mauritania
Mauritius
Ma Ote
Micronesia
Moldova
Mongolia
Montenegro
Montserrat
Morocco
Mozambique
Myanmar
Namibia
Nauru
Nepal
Nicaragua
Niger
Niue
Norfolk Island
North Macedonia
Pakistan
Palestinian Authority
Panama
Paraguay
Peru
Philippines
Saint Kitts and Nevis
Senegal
Sri Lanka
Tajikistan
Tanzania
Trinidad and Tobago
Tunisia
Turkmenistan
Uganda
Ukraine
Uruguay
US Virgin Islands
Uzbekistan
Vanuatu
Vatican City
Venezuela
Vietnam
Wallis and Futuna
Yemen
Zambia
Zimbabwe

Microsoft-managed countries

Countries Countries (cont.) Countries (cont.) Countries (cont.)
Armenia
Austria
Belarus
Bulgaria
Belgium
Canada
Chile
Colombia
Croatia
Cyprus
Czechia
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Iceland
India
Indonesia
Ireland
Italy
Latvia
Liechtenstein
Lithuania
Luxembourg
Malaysia
Malta
Monaco
Netherlands
New Zealand
Nigeria
Norway
Poland
Portugal
Romania
Russia
Saudi Arabia
Serbia
Singapore
Slovakia
Slovenia
South Africa
South Korea
Spain
Sweden
Switzerland
Taiwan
Thailand
Turkey
United Arab Emirates
United Kingdom
United States including Puerto Rico

End-customer taxation with differences in marketplace

Country Commercial Marketplace (Microsoft AppSource and Azure Marketplace) Consumer Marketplace (Microsoft Store)
Brazil Reseller except: Publisher managed for purchases made through Cloud Solution Provider (CSP) customer purchase scenario Developer managed except: Reseller for purchases made via devices running on Windows 10
Mexico Microsoft managed except: Reseller for purchases through enterprise agreement customer purchase scenario Microsoft managed
Australia Microsoft managed except: Publisher Managed for purchases through enterprise agreement customer purchase scenario Microsoft managed
China Marketplace not enabled Reseller enabled except: developer managed for mobile communications devices running Windows phone 7.x and on personal computers running Windows 8.x
Bahrain Publisher managed Microsoft managed
Oman Publisher managed Microsoft managed

Tax considerations on payouts

In Publishers/Developers-managed countries, Microsoft payout to Publishers/Developers is net of the store fee and any applicable taxes, which may include any of the following: withholding tax and sales, use, goods and services, value added or similar taxes on the store fee.

In applicable Microsoft-managed countries and Resellers, Microsoft payout to Publishers/Developers is net of the store fee and any applicable taxes, which may include any of the following: End Customer Tax, withholding tax and sales, use, goods and services, value added or similar taxes on the store fee. The reports Microsoft makes available to Publishers/Developers identifies the amount of these taxes.

Microsoft collects tax on store fees in the following countries where Publishers/Developers elect to make products/offers available for sale to end customers through the Microsoft Marketplace(s):

Country Commercial Marketplace Consumer Marketplace
Australia Tax on service fee Tax on service fee
Canada Tax on service fee Tax on service fee
Mexico N/A Tax on service Fee
New Zealand Tax on service fee Tax on service fee
Singapore Tax on service fee Tax on service fee

Commercial Marketplace payout scenarios

End-customer taxation

  • Scenario one: Customer in a Publisher-managed country purchases an offer

    Chart showing how publisher pays.

  • Scenario two: Customer in a Microsoft-managed country purchases an offer (Publisher country irrelevant)

    Chart showing taxation in Microsoft-managed country.

  • Scenario three: Foreign publisher makes a cross border sale to an EU-value-added tax (VAT) Registered Customer located in a Microsoft-managed country

    Chart showing how EU-VAT affects tax.

  • Scenario four: Foreign publisher makes a domestic sale to a Customer located in a Microsoft-managed country or a non-domestic sale to a Customer in Switzerland

    Chart showing how VAT is handled.

  • Scenario five: Customer in a Microsoft-managed country purchases an offer where there is tax on Store Service Fee

    Chart showing how Store service fee affects tax.

Withholding tax

  • Scenario one: Foreign publisher (with no applicable tax treaty benefits on tax profile) makes a sale to US customer.

    Chart showing withholding tax with no tax treaty.

  • Scenario two: Foreign publisher (with applicable tax treaty benefits on tax profile to zero percent rate) with a treaty makes a sale to US customer.

    Chart showing withholding tax with tax treaty.

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