LogInExplore major 2025 tax updates region by region and uncover what they mean for your game sales in the new year.
Navigating the complexities of tax compliance can be a daunting task for game developers. As tax laws and rates continue to change, staying informed is essential to ensure compliance and avoid unexpected costs. Whether you’re selling digital goods locally or internationally, understanding these changes can make all the difference in managing your revenue streams effectively.
To help you stay ahead, let’s explore major 2025 tax updates region by region and uncover what they mean for your game sales in the coming year.
United States
Virginia
This year, a proposed bill seeking to tax digital goods, including electronically delivered products like software, music, and reading materials, failed to become law. As of the beginning of 2025, digital products remain exempt from Virginia sales and use tax, and there is no ongoing discussion about future implementation. Developers targeting the Virginia market can operate without concern for additional taxation on digital goods for the foreseeable future.
Louisiana
Effective January 1, 2025, Louisiana will raise its state sales tax rate from 4.45% to 5% and expand taxation to cover digital products and services including games, applications, audiovisual works, books, and other digital content. The change reflects a growing trend in the U.S. of adapting tax structures to the digital economy.
LatAm
Peru
An 18% VAT on digital goods and services took effect on December 1, 2024. This timeline follows a delay from October 2024. However, a potential repeal of this tax is still under discussion, so developers should stay updated on its status.
Ecuador
Ecuador has decided to maintain its increased VAT rate of 15% for 2025, reversing earlier discussions about reducing it to 13%. Developers selling digital products in the region should account for this rate in their pricing and compliance strategies.
Europe
Slovakia
Starting January 1, 2025, Slovakia will increase its standard VAT rate from 20% to 23%. This adjustment reflects the government’s fiscal strategy, and developers selling digital products in Slovakia should align their pricing strategies accordingly.
Africa
Kenya
Kenya is making substantial changes to its digital tax framework. Effective January 1, 2025, the country will replace its Digital Service Tax (DST) of 1.5% with a new Significant Economic Presence (SEP) tax that has an effective rate of 3%. This shift underscores Kenya’s move toward a more comprehensive tax policy for digital services.
Southeast Asia
Indonesia
Indonesia will increase its VAT rate from 11% to 12%, effective January 1, 2025. With its large and growing digital consumer base, developers targeting Indonesia must ensure compliance with the updated VAT rate.
The Philippines
The Philippines will introduce a 12% VAT on digital services. Although the law was enacted in October 2024, procedural requirements are still being finalized, with enforcement expected by mid-2025. Developers should monitor developments to prepare for VAT withholding requirements.