We have received the following information from Google regarding VAT for in app purchases:
Beginning January 1, 2015, due to a change in Value-Added Tax (VAT) laws in the European Union (EU), Google will be responsible for determining, charging, and remitting VAT for Google Play paid apps and in-app purchases for EU customers. No action will be required on your part.
Please note that even if you're not located in the EU, this change in VAT laws will still apply for purchases made by EU customers. Once the change is in place, you won't need to calculate and send VAT separately for purchases made by EU customers.
Because Google will be responsible for remitting VAT for EU customers' app purchases to the appropriate authority, you'll be able to save time previously spent on calculating and remitting VAT for your customers' purchases. To see examples of how this change can affect payouts, visit the Google Play Developer Help Center.
If you're currently selling apps or content in the EU and want to update your items' prices, you can review and adjust prices for paid apps and in-app purchases on your apps' Pricing & Distribution and In-app Products pages on the Google Play Developer Console.
Please note: At this time, we're unable to change prices for existing subscription products. Beginning January 1, 2015, VAT will be determined and remitted using existing prices for subscription products. Any existing subscribers will continue to pay the same price for their subscriptions. Depending on how you've previously calculated taxes for subscriptions, your payouts may be affected.
Also, we'll be adding VAT-inclusive pricing to the following countries: Bulgaria, Croatia, Cyprus, Hungary, Latvia, Lithuania, Malta and Romania on January 1, 2015. In countries with VAT-inclusive pricing, prices shown on Google Play must be equal to the amount paid during payment - all taxes (including VAT) must be included in the price. Using the Google Play Developer Console, you can review your prices for paid apps and in-app purchases in these countries.