(Well, I suppose that technically all of my sales are international, since I’ve never sold a copy in Japan. Be that as it may, the business is headquartered in the US even if I’m not, or at least thats my story and I’m sticking to it when it comes to taxes and banking matters.)
Bingo is popular throughout the English speaking world (and in some points beyond, too), so its not too shocking that I have a few customers from outside the US. Probably, oh, off the top of my head 10% or so. I was unsatisfied with my previous level of service for them, chiefly because I had the prices listed only in dollars and this both confused the Australians (hey, I could just have easily have been an Aussie uISV, and there is nothing in my website to tell you differently — doh) and costed all of my customers currency exchange fees when dealing with Paypal. I hate currency exchange fees with a burning passion in my soul, having been burned by them plenty (Bank of America will happily ding you for 3% a transaction). So I decided to price my product natively. There are a couple of issues here.
VAT: Ahh, I love the smell of overly-complicated growth-killing Eurocrat mandated regulations in the morning. VAT, for value added tax, is a freaking gigantic consumption-esque tax you have to worry about if you sell in Europe. My position on VAT is simple: I’m a small businessman, I have never set foot in Europe, and I do not want to deal with the hassle of collecting this tax. I give my customers one method (using eSellerate), which has them pay the tax (something like 20% of the purchase price!) and one method (Paypal) which doesn’t. They can worry about their own local laws. Incidentally, with respect to my local laws, I’m scrupulous about not actively selling in Japan (because I don’t have the legal structure required to remit Japanese sales taxes yet — thats 5%, incidentally), and I will pay sales tax on all of my orders in Illinois. I don’t know if Illinois will be very happy that I don’t ask for people’s address unless they ask for a CD, but I’m highly unlikely to pass the minimum dollar amount for tax reporting anyhow.
What to charge folks: I got out Google’s currency converter, plugged in $24.95 in the various currencies, rounded to a convinient number in whatever direction was required, and then chopped off 5/100 of the local currency. My guiding principle was to be mostly fair without sacrificing the convinience of round numbers, which as I recall results in the Brits paying a wee bit more and the Aussies paying a wee bit less relative to the USD than other customers. However, I’m pretty sure all of my international customers benefit in that I absorb their currency conversion costs through Paypal rather than them absorbing it through their banks. (This is a matter for me of a few dimes worth of profit per sale, less than nothing really, but its a small thing you can do to really endear yourself to a fraction of your customers. I’m all about that.)
I’m thinking of officially incorporating myself next year, but there are some non-trivial issues with incorporating in Japan (“Proof of 3 million yen worth of business capital… hmm, well, can I count all the money I spent on college as human capital? Because thats the only way I’ve had nearly $30,000 at any point in my life.”)
