UK e-book prices to rise from 1st January 2015

[HarryT]

Originally Posted by CommonReader

I read somewhere that Amazon was forcing the publishers to price their books as if Amazon had to levy the rate of VAT in the UK and other places for quite a while already.
In places with fixed book prices like Germany Amazon was selling the books at the same price as other retailers. You are kindly invited to guess who was pocketing the difference between 19% VAT in Germany and 3% VAT in Luxembourg.
This regulation was well overdue to stop sweetheart deals as Amazon did with Luxembourg.

That sounds extremely improbable to me. It would be illegal to claim to be charging 19% VAT while only in fact charging 3%. Pretty much all of Amazon's ebook prices fell in the UK when they moved their operation to Luxembourg.

Do you have any sort of link to support what you've said?

[jbjb]

Originally Posted by fjtorres

Facing unlimited fines, even if somebody spoofs the IP address, she may end up closing the ebook store. So everybody loses, globally.

Indeed, and it's not just deliberate spoofing of the IP address which can cause these issues - IP addresses are a very unreliable means of determining location. For example, at one point I worked in a UK office of a multinational company whose connection to the public internet for all its European operations was in Amsterdam. Any sites I went to assumed I was in the Netherlands (e.g. I'd get the non-UK variant of the BBC website).

I see no way a small business like a minor self-published author could or should be expected to deal with that sort of complexity.

/JB

[j.p.s]

Originally Posted by HarryT

Are you sure? Seems like fraud to me, if you're doing it for purposes of financial gain. Actually being based in another country is fine, but not claiming to be, when you're really not, AFAIK.

I think that mr ploppy's point was that what Amazon were doing via Luxembourg when selling a limited license to read a book was no different that using a VPN while paying for said license. You may be able to come up with some minor distinction, but it is a valid point of view.

[Little.Egret]

Originally Posted by taustin

How are they planning to enforce that on companies that have no presence in the EU? Troop deployments?

It's a long term project and not new.

Consider the attempts of the US Federal Government to stop Americans using offshore internet gambling sites.

Pressure on associates that are EU resident may be possible

I bought Lois Bujold's _Memory_ from Fictionwise in December 2003 and they added VAT, though this didn't last long.

[Little.Egret]

Originally Posted by HarryT

That sounds extremely improbable to me. It would be illegal to claim to be charging 19% VAT while only in fact charging 3%. Pretty much all of Amazon's ebook prices fell in the UK when they moved their operation to Luxembourg.

Do you have any sort of link to support what you've said?

There was a claim in the Guardian to that effect but that newspaper isn't much on tax expertise.

For the future, each Kindle store will charge the same price based on the VAT rate in its principal sales area and the Authors will gain or lose for any states with different rates.

Announcement: EU VAT Changes – KDP Impact
https://kdp.amazon.com/community/ann.jspa?annID=646

So e-book sales from Amazon.co.uk will be priced for 20% UK VAT and sales in the Irish Republic will pay VAT at 23% and Amazon's take and the author royalties will be less.

Sales from Amazon.de will be priced at the German 19% VAT with sales in Luxembourg (3% VAT) yielding that much more in Amazon's take and the author royalties .

This may also let Amazon postpone the decision as which EU member state the customer is in until the download has occurred.

[fjtorres]

The likeliest outcome will be that KDP publishers will set their price based on the highest VAT and pocket the variation elsewhere.

[Billi]

Originally Posted by HarryT

That sounds extremely improbable to me. It would be illegal to claim to be charging 19% VAT while only in fact charging 3%. Pretty much all of Amazon's ebook prices fell in the UK when they moved their operation to Luxembourg.

Do you have any sort of link to support what you've said?

I guess commonreader meant it this way: an ebook has been priced the same brutto price (e.g. 19,95 Euro) at Amazon and at the other ebook vendors here. At Amazon, this price contained 3% VAT, at the other stores 19%. For the customers, there has been no difference.

[HarryT]

Originally Posted by Little.Egret

There was a claim in the Guardian to that effect but that newspaper isn't much on tax expertise.

For the future, each Kindle store will charge the same price based on the VAT rate in its principal sales area and the Authors will gain or lose for any states with different rates.

Announcement: EU VAT Changes – KDP Impact
https://kdp.amazon.com/community/ann.jspa?annID=646

So e-book sales from Amazon.co.uk will be priced for 20% UK VAT and sales in the Irish Republic will pay VAT at 23% and Amazon's take and the author royalties will be less.

Sales from Amazon.de will be priced at the German 19% VAT with sales in Luxembourg (3% VAT) yielding that much more in Amazon's take and the author royalties .

This may also let Amazon postpone the decision as which EU member state the customer is in until the download has occurred.

Thanks for explaining it. That does seem to make sense.

[mr ploppy]

Originally Posted by HarryT

Are you sure? Seems like fraud to me, if you're doing it for purposes of financial gain. Actually being based in another country is fine, but not claiming to be, when you're really not, AFAIK.

If that's the case, Luxemburg must be a very large country with all those massive international businesses who are based there.

[mr ploppy]

Originally Posted by Pablo

On the subject of tax evasion, let's remember some U.K. controlled tax havens like Jersey, Guernsey, Isle of Man, the British Virgin Islands, Bermuda and the Cayman Islands.

Nothing will happen to those because most of the government have money stashed away in them.

[mr ploppy]

Originally Posted by fjtorres

The likeliest outcome will be that KDP publishers will set their price based on the highest VAT and pocket the variation elsewhere.

Most probably won't know about the different rates, but there will be a lot of rounding up to the nearest 50p. Charging weird amounts for things just makes you look amateur.

[HarryT]

Originally Posted by mr ploppy

Most probably won't know about the different rates, but there will be a lot of rounding up to the nearest 50p. Charging weird amounts for things just makes you look amateur.

Ebook prices are already pretty random. The last few books I've bought from Amazon have cost £4.82, £5.49, £3.71 and £5.14 respectively. All from major publishers. There may be more logic to it than meets the eye: for example £5.14 is £4.99 + 3% VAT.

[CommonReader]

Originally Posted by HarryT

That sounds extremely improbable to me. It would be illegal to claim to be charging 19% VAT while only in fact charging 3%. Pretty much all of Amazon's ebook prices fell in the UK when they moved their operation to Luxembourg.

Do you have any sort of link to support what you've said?

As far as I know Amazon shows no VAT on their sales bill which makes it useless for tax purposes.

As to pricing and VAT you may look here:

http://www.telegraph.co.uk/culture/b...ublishers.html

[CommonReader]

Originally Posted by Billi

I guess commonreader meant it this way: an ebook has been priced the same brutto price (e.g. 19,95 Euro) at Amazon and at the other ebook vendors here. At Amazon, this price contained 3% VAT, at the other stores 19%. For the customers, there has been no difference.

Exactly.

[murg]

I had a scary thought...

This new regime involves as tacit agreement by the vendor that they are doing business in the EU, and are subject to EU tax laws.

What's to stop the EU (or any of the member countries) from passing a tax law that says that anyone doing business with EU customers have to pay a profit tax to that EU country. The profit tax doesn't even have to be proportional to the sales from that country. And of course, the write-off laws are different in every country.

Imagine a Delaware based US company having to file a tax return in Delaware, the US, and twenty different European countries.