Why is our app store payout less than what players paid?
Two kinds of deduction usually sit between those figures. The first is the platform's own commission, which is a commercial charge. The second is tax: the platform may have accounted for indirect tax on the player's purchase in the player's country, and in some territories it may also have deducted withholding tax from the amount it pays you. Only one of those is potentially recoverable by you. The platform's financial reports separate them if you open the detailed report rather than the summary, and you need that split both to book revenue correctly and to claim any foreign tax. Start from the detailed statement, never from the bank deposit.
Do we owe tax where our players are or where we are?
Both questions have answers, and they are not the same answer. Your profits are taxed where the studio is established, and potentially in any other country where your activity gives that country a claim. Indirect tax on an in-app purchase is generally owed where the player bought it, which is why the platforms have built collection into their storefronts for many territories. The point to check is which territories your platform accounts for and which it leaves to you, because that division differs by platform and changes over time. Where the platform does not account for it, the obligation has not disappeared.
Can we reclaim tax the platform deducted from our payout?
Only if you can identify what it was. A deduction described as withholding tax in a particular territory may be creditable at home or reducible under a treaty, and both routes need evidence: the platform's statement showing the deduction, and usually a certificate or equivalent record. A deduction that is in fact indirect tax accounted for on the player's purchase is not yours to reclaim at all, because it was never your money. Studios lose this by booking the net deposit as revenue and never opening the statement. Separate the lines first, then deal with the withholding on its own, in the year it arose.
Are our overseas contractors really employees for tax purposes?
That is decided by the country where the person works, on its own tests, and not by the words in your agreement. Studios build teams this way because it is quick, and the arrangement often continues for years with one person working full time for one studio under a contractor label. The tests commonly look at control, integration into the team, who provides the tools, and whether the person can in practice work for others. Where the answer comes back as employment, the studio usually faces payroll registration and arrears in that country. Review the longest-standing engagements first, because they carry the most exposure.
Do in-app purchases need us to register for tax abroad?
In some territories yes, and in others the platform handles it. The obligation follows the player's location, so the relevant list is the territories your players are in, checked against what your platform states it accounts for in each. Anything the platform does not cover falls back to you, and the local registration test then applies to your sales there. This is a data exercise before it is a tax one. You need player-location figures on the basis each territory measures, which the platform reports will give you if you take them by territory rather than as a global total.
How do we reconcile platform reports to our own accounts?
By recording gross player spend, the platform commission, any indirect tax the platform accounted for and any withholding it deducted as separate figures, then agreeing the remainder to the bank. Most studios book the deposit and stop there, which means the accounts understate revenue, hide the commission entirely and lose every foreign tax deduction that might have been claimable. Take the detailed report each period, map its columns once to your ledger codes, and have the reconciliation done by whoever prepares the management accounts. The first time is slow. After that it is routine, and it makes the tax questions answerable.
What does "RIC" mean on my foreign tax paid statement?
Registered Investment Company — a US mutual fund or ETF. When a fund holds securities from many countries it may report the foreign tax it paid on your behalf without breaking it down by country, using RIC as the country label. You are allowed to use it that way on Form 1116 for that income, which saves you reconstructing a country-by-country split you have no way of knowing. See Form 1116.
How do I actually stop being taxed twice?
In this order. Fix your residence under each country's own rules, and if both claim you, apply the treaty tie-breaker. Identify where each type of income is sourced. Read the article that covers that income type, because it decides who taxes and at what maximum rate. Then claim the relief on the residence-country return, with proof of the foreign tax. Most of the tax people lose to double taxation is lost at the last step, not the first. See how double taxation is relieved.
