On 13/05/2012 14:33, Matthew Pickering wrote:
Right but as a vat exempt uk developer selling a app to a uk citizen vat should 
not be paid but it is.


This will not happen if you are exempt of VAT as developer since you would set no VAT for your app. Google will add VAT to the final price to present that to user. If your VAT settings is 0 this will change nothing.

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