Understanding the intricacies of tax obligations is essential for developers and publishers working with Steam. This guide provides detailed insights into Steam’s tax reporting procedures, withholding requirements, and applicable rates across different regions, ensuring you stay compliant and informed.
Reporting
Steam’s reporting system offers annual summaries of your earnings, tailored to your tax status and the nature of your income. If you have submitted a W8 form as a non-U.S. taxpayer, you will receive a 1042-S form, which details your US source income and the withholding tax Valve has deducted on your behalf. Conversely, if you submitted a W9 as a U.S. taxpayer, you will generally receive a Form 1099, unless your entity is a C-corp or S-corp (or LLC filing as such). It’s important to note that starting with the 2018 tax year, Valve no longer issues 1099 forms to C- and S-corporations, aligning with IRS requirements. To review your earnings and payment history, visit the Steam payments reporting page. This section also provides instructions on how to access your payment records for accurate tax reporting.
When Will You Receive These Forms?
Valve issues these tax documents in accordance with IRS deadlines. The 1099 forms are typically sent by January 31st, and the 1042-S forms by March 15th. If you have not opted for electronic delivery, your forms will be mailed physically to your registered address. Additionally, copies of these documents can be accessed within your Steam partner account under the tax information section, ensuring you have all necessary paperwork before tax season.
Withholding Taxes
How Much Will Be Deducted?
After completing your tax interview, Valve will specify your withholding rate, which can range from 0% to 30% of your US source income. If your rate is 30% but you reside in a country with a tax treaty with the U.S., you may be eligible to reduce this rate by submitting the appropriate documentation. Countries with tax treaties are listed in the IRS treaty list. If you provide a U.S. or foreign TIN during your tax interview, Valve may adjust your withholding rate accordingly, but previous withholding amounts are generally not refundable. To understand how withholding impacts your payments, review your monthly reports where the “US Share” indicates the portion of your revenue derived from U.S. sales. This figure is fundamental in calculating the correct withholding amount.
What If There’s No Tax Treaty?
In cases where your country does not have an existing tax treaty with the U.S., Valve is required by the IRS to withhold a flat rate of 30% from your payments, which is then remitted directly to U.S. tax authorities. To potentially reduce this withholding, consult with your tax advisors to explore the possibility of claiming a foreign tax credit or applying for a TIN, which may help lower the withholding rate.
Understanding Different Withholding Rates
Your tax information may display separate withholding rates for different content types, such as copyright royalties versus film royalties. These rates are applied based on the nature of your sales—royalties from game sales versus video content—and do not stack. If you update your tax interview data with a valid TIN, Valve may adjust your withholding rate for future payments; however, previous withholding amounts are not typically refundable.
US TINs
Why Is an ITIN Necessary?
Most foreign developers receive U.S. source income subject to a 30% withholding unless a tax treaty provides a lower rate. To claim treaty benefits, you need a U.S. TIN, which can be an Employer Identification Number (EIN) or an Individual Taxpayer Identification Number (ITIN). Applying for an ITIN does not require you to file a U.S. tax return. For more information on obtaining a U.S. TIN, including the application process, visit the IRS instructions for Form SS-4.
How Long Does It Take to Receive an ITIN?
It can take several months for the IRS to process and issue an ITIN, so plan accordingly if you intend to leverage treaty benefits or reduce withholding.
VAT and Sales Tax
How Are Taxes Applied to Steam Sales?
Steam applies VAT, GST, or JCT in specific countries where local laws mandate their collection. The applicable tax rate is included in the listed price or added at checkout, depending on the jurisdiction. Valve periodically remits these collected taxes to local authorities. In countries without such laws, sales are considered cross-border, and no tax is collected on those transactions. For detailed information on country-specific VAT rates and how they impact your earnings, consult the current tax rates list.
Do You Need to Handle VAT or Sales Taxes?
While Valve manages the collection and remittance of taxes where applicable, publishers are responsible for understanding their own tax obligations. The monthly Steam Sales Report, accessible via the partner portal, includes a “Steam Sales by Country” breakdown, which can assist in calculating your tax liabilities.
Current Tax Rates
Steam collects taxes in various regions, either inclusive or additive. Taxes are updated regularly to reflect new laws. For example, in Austria, a 20% VAT is included in the price, whereas in the United States, sales tax varies by state and is added at checkout. The list below provides current rates for many countries, but always verify with local authorities for the most up-to-date information.
| Country (?) | Country Name | Tax Rate | Tax Type |
|————–|————–|———-|———-|
| AE | United Arab Emirates | 5% | Inclusive |
| AT | Austria | 20% | Inclusive |
| AU | Australia | 10% | Inclusive |
| BE | Belgium | 21% | Inclusive |
| BG | Bulgaria | 20% | Inclusive |
| BY | Belarus | 20% | Inclusive |
| CH | Switzerland | 8.1% | Inclusive |
| CL | Chile | 19% | Inclusive |
| CO | Colombia | 19% | Inclusive |
| CY | Cyprus | 19% | Inclusive |
| CZ | Czech Republic | 21% | Inclusive |
| DE | Germany | 19% | Inclusive |
| DK | Denmark | 25% | Inclusive |
| EE | Estonia | 24% | Inclusive |
| EG | Egypt | 14% | Inclusive |
| ES | Spain | 21% | Inclusive |
| FI | Finland | 25.5% | Inclusive |
| FR | France | 20% | Inclusive |
| GB | United Kingdom | 20% | Inclusive |
| GR | Greece | 24% | Inclusive |
| HR | Croatia | 25% | Inclusive |
| HU | Hungary | 27% | Inclusive |
| ID | Indonesia | 11% | Inclusive |
| IE | Ireland | 23% | Inclusive |
| IM | Isle of Man | 20% | Inclusive |
| IN | India | 18% | Inclusive |
| IS | Iceland | 24% | Inclusive |
| IT | Italy | 22% | Inclusive |
| JP | Japan | 10% | Inclusive |
| KR | Korea, Republic of | 10% | Inclusive |
| KZ | Kazakhstan | 12% | Inclusive |
| LT | Lithuania | 21% | Inclusive |
| LU | Luxembourg | 17% | Inclusive |
| LV | Latvia | 21% | Inclusive |
| MC | Monaco | 20% | Inclusive |
| MD | Moldova | 20% | Inclusive |
| MT | Malta | 18% | Inclusive |
| MX | Mexico | 16% | Inclusive |
| MY | Malaysia | 8% | Inclusive |
| NL | Netherlands | 21% | Inclusive |
| NO | Norway | 25% | Inclusive |
| NZ | New Zealand | 15% | Inclusive |
| PE | Peru | 18% | Inclusive |
| PH | Philippines | 12% | Inclusive |
| PL | Poland | 23% | Inclusive |
| PT | Portugal | 23% | Inclusive |
| RO | Romania | 21% | Inclusive |
| RS | Serbia | 20% | Inclusive |
| RU | Russia | 20% | Inclusive |
| SA | Saudi Arabia | 15% | Inclusive |
| SE | Sweden | 25% | Inclusive |
| SG | Singapore | 9% | Inclusive |
| SI | Slovenia | 22% | Inclusive |
| SK | Slovakia | 23% | Inclusive |
| TH | Thailand | 7% | Inclusive |
| TR | Turkey | 20% | Inclusive |
| TW | Taiwan | 5% | Inclusive |
| UA | Ukraine | 20% | Inclusive |
| XC | China | 6% | Inclusive |
| ZA | South Africa | 15% | Inclusive |
Future Tax Implementations
Valve continues to adapt to evolving laws, with upcoming taxes scheduled for implementation in various countries, such as Bangladesh and Kazakhstan, starting from 2026. Stay updated with local tax laws and consult your tax advisors for compliance.
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Valve’s platform offers a robust set of tools to help you manage your game sales effectively on Steam. For further details on integrating these features into your business strategy, explore resources like transforming game ideas into successful products or learn about the latest in mobile gaming app development. Proper understanding of tax obligations ensures smooth operations and compliance across all regions you serve.