By the way, 65 € is not $75, it's $90.

$90 / 1.2 = $75

So a 65 € game costs $75 before tax.

U are wrong NJ5.

No, multipy by 0.8, or if you want to, divide by 1.25%.

The basic net price is $60, then EU gov comes and adds it's 25% VAT = 60x1.25=75

That's not how VAT works. VAT is applied on the price before tax.

Here's a VAT calculator:

http://www.nolanassociates.com/Tools/Calculators/VAT_Calculator

EDIT - why did you use 20% VAT in one example and 25% in another? What a mess you're creating here :P

Yes, at the moment, but game pricing in Europe doesnt follow currency changes that strictly.

Game market need consistency, that's why for example an American sold game is always $60 no matter if it's published by an American, Japanese or Swedish publisher.

There's a certain price elasticy in Europe yes, but I tried to average it over time.

And on average in the last decade I'd think the rate  Euro - Dollar is more like 1:1.2

Yes, sorry. But u started the confusion by bringing in division instead of multiplication lol.

That's because the division is the correct way to calculate it.

Find me a single VAT calculator or explanation which calculates the way you did.

Yes yes.

Do it all over with using 25% VAT and the correct way then.

I just presented it wrong (by starting with the gross/retail price), but the outcome was the same.

I think most Western European countries have 25% VAT.

I think we are one of the highest (if not the highest) => 21%

Ok i c why I confused NJ5 now. He probably keeps track of the European VAT average which according to Wikipedia seems to be on average ~20% (not 25% as in Sweden) and assumed I was using that number, which would have meant that my calculation was wrong.

http://en.wikipedia.org/wiki/European_Union_Value_Added_Tax