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      GameDev.net and CRC Press have teamed up to bring a free ebook of content curated from top titles published by CRC Press. The freebook, Practices of Game Design & Indie Game Marketing, includes chapters from The Art of Game Design: A Book of Lenses, A Practical Guide to Indie Game Marketing, and An Architectural Approach to Level Design. The GameDev.net FreeBook is relevant to game designers, developers, and those interested in learning more about the challenges in game development. We know game development can be a tough discipline and business, so we picked several chapters from CRC Press titles that we thought would be of interest to you, the GameDev.net audience, in your journey to design, develop, and market your next game. The free ebook is available through CRC Press by clicking here. The Curated Books The Art of Game Design: A Book of Lenses, Second Edition, by Jesse Schell Presents 100+ sets of questions, or different lenses, for viewing a game’s design, encompassing diverse fields such as psychology, architecture, music, film, software engineering, theme park design, mathematics, anthropology, and more. Written by one of the world's top game designers, this book describes the deepest and most fundamental principles of game design, demonstrating how tactics used in board, card, and athletic games also work in video games. It provides practical instruction on creating world-class games that will be played again and again. View it here. A Practical Guide to Indie Game Marketing, by Joel Dreskin Marketing is an essential but too frequently overlooked or minimized component of the release plan for indie games. A Practical Guide to Indie Game Marketing provides you with the tools needed to build visibility and sell your indie games. With special focus on those developers with small budgets and limited staff and resources, this book is packed with tangible recommendations and techniques that you can put to use immediately. As a seasoned professional of the indie game arena, author Joel Dreskin gives you insight into practical, real-world experiences of marketing numerous successful games and also provides stories of the failures. View it here. An Architectural Approach to Level Design This is one of the first books to integrate architectural and spatial design theory with the field of level design. The book presents architectural techniques and theories for level designers to use in their own work. It connects architecture and level design in different ways that address the practical elements of how designers construct space and the experiential elements of how and why humans interact with this space. Throughout the text, readers learn skills for spatial layout, evoking emotion through gamespaces, and creating better levels through architectural theory. View it here. Learn more and download the ebook by clicking here. Did you know? GameDev.net and CRC Press also recently teamed up to bring GDNet+ Members up to a 20% discount on all CRC Press books. Learn more about this and other benefits here.
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3DModelerMan

How do you report taxes on game sales?

7 posts in this topic

Hey, I'm researching starting my own game company. I understand everything so far, except for one thing.... what taxes apply to games that are published by another company? I'm going to distribute through Union, and I know they give you 80% royalties. Do you have to report any sort of sales tax? Or only income tax on what you earn from the royalties? I would assume the publisher takes care of sales tax right? Are there any other kinds of taxes I'm forgetting?
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[quote name='3DModelerMan' timestamp='1306205182' post='4814852']
Hey, I'm researching starting my own game company. I understand everything so far, except for one thing.... what taxes apply to games that are published by another company? I'm going to distribute through Union, and I know they give you 80% royalties. Do you have to report any sort of sales tax? Or only income tax on what you earn from the royalties? I would assume the publisher takes care of sales tax right? Are there any other kinds of taxes I'm forgetting?
[/quote]

That really depends on where you live, ask your local authorities (There should be some form of tax department you can contact with questions like these)

The publisher should deal with sales tax but exactly how your royalties are taxed varies. In some countries profits from hobbies is taxed separatly or not at all if the amounts are small, in others the revenue is just taxed as additional income.

If you register a business you're normally allowed to deduct your expenses but taxes for individuals and businesses aren't necessarily the same. (its quite common that they're different)
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We aren't allowed to give legal advice - please consult with your local tax office. Seriously, if you are starting a business (a [i]business,[/i] not a 'team' or similar) then you should consult with a tax professional, probably a IT lawyer and possibly with a business lawyer, depending on the complexity of operations, and what not to make sure you're covered as far as trademarks, intellectual property and whatever necessary taxing requirements you should meet are concerned. Failure to do this can result in all sorts of nastiness down the road. Once again, if you are [i]serious[/i] don't waste your time listening to random internet dudes but instead take the time to consult with your tax office - hell, over here I even got that for free [i]and [/i]all the people I meet over there were super nice and gave some real solid advice! So if you're gonna do it; do it [i]right[/i].

Please note that income tax (e.g. personal income being taxed) and the [i]net profit/gross[/i] of your company being taxed are considered two completely separate procedures and should be treated as such (e.g. your business income and your salary should not directly interfere with each other and should be taxed separately in accordance to whatever your local law states). Sales tax will be handled by the publisher or distributor, if they state so. Any additional taxes will be handled by the publisher or distributor, if they state so. Anything else falls directly upon your business and your local tax authority. If the sales expected are low or not really enough to get into this whole 'business' stuff then perhaps it would be easier to state it as income tax but, yet again, it would be wise to first consult with a tax professional to see if this is the case.

DISCLAIMER: I am not a lawyer, nor I am proficient in the laws of whatever your local region is, however, I have set up a business and been doing much of this research myself recently so take it for what it is.
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Basically the government will take every penny you make available to them. If you make a mistake they will demand immediate payment, if they make a mistake they will tell you that you are waiting until at least the end of the current financial year to get that money back (and without interest added).

Sorry that's just my view of the $£%^%£%£$£"!%$£££$%£!$%^ government. They once tried to tax me on 15p (about 20 cents for our american friends) interest I got from my bank account and sent out two letters asking for payment. the letters each had stamps worth more than the amount they were chasing.....


rant over, feel better now..
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[quote name='3DModelerMan' timestamp='1306205182' post='4814852']
1. what taxes apply to games that are published by another company? I'm going to distribute through Union, and I know they give you 80% royalties.
2. Do you have to report any sort of sales tax? Or only income tax on what you earn from the royalties? I would assume the publisher takes care of sales tax right?
3. Are there any other kinds of taxes I'm forgetting?
[/quote]
I am not a lawyer or CPA.
1. Your company pays income tax on the money your company receives. You pay income tax on the money you get from your company.
2. Sales tax is for when your business sells direct to the consumer.
3. Yes. Talk to your attorney and your CPA.
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(General Theory) (my Location is South Africa)
so, you only have to pay tax if you sell something and your a business, am i right ?
if so, i can sell a game as hobby thingy and not have to pay tax

or does it depend from country, what about where you are ?
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[quote name='ryan20fun' timestamp='1306255280' post='4815185']
(General Theory) (my Location is South Africa)
so, you only have to pay tax if you sell something and your a business, am i right ?
[/quote]
No. You have to pay tax if your government requires you to pay income taxes and if you earn some income. If you make money, you have to pay tax on it, if that is the law where you live. No matter whether you are a business or an individual (depending on the laws where you live).
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[quote name='Tom Sloper' timestamp='1306265127' post='4815264']
[quote name='ryan20fun' timestamp='1306255280' post='4815185']
(General Theory) (my Location is South Africa)
so, you only have to pay tax if you sell something and your a business, am i right ?
[/quote]
No. You have to pay tax if your government requires you to pay income taxes and if you earn some income. If you make money, you have to pay tax on it, if that is the law where you live. No matter whether you are a business or an individual (depending on the laws where you live).
[/quote]

Thanks
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