From Singapore to Slovakia, VAT Rates Are Rising: Here’s What Game Studios Need to Know for 2025

If you run a gaming business that sells directly to players, you already know—staying compliant with global tax changes can feel like a full-time job. Governments worldwide are constantly tweaking VAT (also known as sales tax). In 2024 alone, dozens of countries updated their tax structures, and 2025 will bring even more changes.

So, let’s break it down: What happened in 2024? What’s coming in 2025? And what does it mean for your business?

🌍 2024’s Biggest Tax Changes: What Just Happened?

Multiple VAT Hikes in Europe, Asia and South America

• January 2024: Singapore and Switzerland raised their standard VAT rates. Morocco also mandates a 20% VAT on digital services.
• March 2024: Malaysia increased its service tax from 6% to 8%, impacting digital businesses operating in the region.
• July 2024: Philippines enacted a 12% VAT on digital services provided by foreign remote sellers in 2024. Applies to foreign companies exceeding PHP 3M in annual sales.
• August 2024: Laos introduced a 10% VAT on digital services.
• September 2024: Finland moved its VAT rate from 24% to 25.5%, making it the second-highest in the EU after Hungary’s 27%.
• December 2024: Peru enacted an 18% VAT on digital services provided by foreign remote sellers.

U.S. Sales Tax Adjustments:

• More than 500 local tax changes happened across the U.S. in 2024.
• Virginia & Nebraska: Both states have proposed expanding sales tax to digital goods and services, though legislation has not yet been enacted.

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What’s Changing for Game Publishers in 2025?

Governments across the globe are adjusting tax rates and compliance rules for digital transactions, making it more critical than ever for publishers to stay informed. Here’s a breakdown of the most important tax updates that could affect your revenue and pricing strategy this year.

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• Israel: VAT increased from 17% to 18%, affecting pricing for local transactions.
• Slovakia: VAT jumped from 20% to 23%, following a broader European trend toward higher digital tax rates.
• Washington, D.C: Sales tax rate on digital goods will increase from 6% to 6.5% on Oct 1, 2025, and to 7% by Oct 1, 2026 .
• Louisiana, USA: Effective Jan 1, 2025, digital goods and services will now be subject to sales tax.
• Illinois, USA: Game publishers selling virtual items must comply with new destination-based tax rules, meaning tax rates depend on the buyer’s location rather than the seller’s.

What This Means for Publishers

• Do you sell in multiple countries? You need a system that automatically tracks tax changes and updates rates in real time.
• Are you processing high-volume transactions? Small tax rate shifts (even 1-2% increases) can cut into margins if pricing isn’t adjusted accordingly.
• Are you handling compliance manually? If you’re still managing tax filings in-house, expect it to get harder as rules become more complex.

With tax regulations becoming more complex and stringent – U.S. tax agencies, for instance, are increasing enforcement using AI to track remote digital transactions – compliance is more critical than ever. In our next article, we’ll dive into how publishers can navigate these tax challenges and how Appcharge ensures seamless compliance for game publishers worldwide.

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