Ebook taxes called unfair by publishers

[fjtorres]

From the NYT:

http://www.nytimes.com/2015/07/30/ar...fair.html?_r=0

E-books, which according to PricewaterhouseCoopers represent a quarter to a third of consumer book sales in the United States and Britain, have largely failed to catch on outside English-language markets.

The reasons for this failure are complicated, rooted in cultural resistance from readers and economic policies that protect traditional publishers. Rules in countries like Germany and France prohibit the kind of deep discounts on digital books relative to print that have lifted e-book sales in English-language markets. But another, less publicized factor is taxation, which in the case of e-books is all over the map.

This month, the International Publishers Association released a survey of how digital and printed books are taxed in 79 countries, showing that e-books are on average taxed twice as highly as printed books, 12.25 percent to 5.75 percent. In many European countries, including Sweden, Ireland and Hungary, the value-added tax on a printed book is negligible or waived, while the same book’s digital version is taxed at more than 20 percent.

More at the source, including charts and numbers.

[fjtorres]

Note that they are flagging it as a global problem.
The EU countries gets a lot of deserved flack over it but they aren't alone.

Interesting that Norway is tops.

[rem736]

what tax is this? it doesn't sound like a sales tax, which should be standard across all items sold by retailers.

[patrickt]

It would appear to be unfair so I wonder what editorial position the NYT will take. They usually are in favor of unfair taxes.

[tubemonkey]

Poor publishers, they can't make their minds up. On the one hand, they complain because ebooks are placed in a different category than paper books and taxed higher as a result. Yet when libraries complain that ebooks are placed in a different category than paper books and given harsher loan restrictions, the publishers are quick to defend this differentiation.

Hypocrites!

[fjtorres]

Originally Posted by tubemonkey

Poor publishers, they can't make their minds up. On the one hand, they complain because ebooks are placed in a different category than paper books and taxed higher as a result. Yet when libraries complain that ebooks are placed in a different category than paper books and given harsher loan restrictions, the publishers are quick to defend this differentiation.

Hypocrites!

Well, these are not necessarily the same publishers.
The real point that jumped out at me is that these particular publishers are seeing the higher margins of ebooks and how much money (and low risk) it could bring them and they are starting to put distance between them and B&M bookstores.

That realization, that the interests of B&M stores aren't necessarily their interests is sooner or later going to lead the non-BPH publishers to follow Indies and specialty publishers into ebookland, bookstores be darned.

[bevdeforges]

Originally Posted by rem736

what tax is this? it doesn't sound like a sales tax, which should be standard across all items sold by retailers.

In Europe it's the VAT - which is kind of like a sales tax, and kind of not. But the EU Commission or whoever rules on this sort of thing has ruled that e-books are not books, but rather "data files" and thus are subject to the regular (i.e. high) tax rate. As data files, too, e-books are subject to the VAT rate in the country of residence of the customer, not the place of business of the seller.

Many EU countries charge a lower VAT rate on books, magazines and newspapers, based on them being considered "cultural."

[ingmar]

Originally Posted by rem736

what tax is this? it doesn't sound like a sales tax, which should be standard across all items sold by retailers.

Yes, it's VAT. Taxes on traditional books are often waived (culture and all that), or at least reduced, but since ebooks are considered an "electronic service" they are not.

Yes, this is idiotic. That said, "deep discounts on digital books relative to print books" are by no means forbidden, it's just that the publishers would have to set them: While it's illegal to sell books below publisher-set retail prices, there's nothing keeping publishers from setting prices for ebooks significantly lower than hardcover or paperback editions. They just prefer not to.

[AnnGirdharry]

interesting article
Of course, the advantage for indie writers are the low costs of ebook production and distribution which gives us an 'in' to the market if we price (at least) one of our books low to attract attention.
So, it suits me if traditional publishers want to keep the cost of their ebooks high, not withstanding the taxing issues.....

[fjtorres]

Originally Posted by AnnGirdharry

interesting article
Of course, the advantage for indie writers are the low costs of ebook production and distribution which gives us an 'in' to the market if we price (at least) one of our books low to attract attention.
So, it suits me if traditional publishers want to keep the cost of their ebooks high, not withstanding the taxing issues.....

And those are the same benefits these international publishers are eyeing.
But for it to work for their large overheads, they need ebooks to break out of the hobbyist niche and into the mainstream.

[maddz]

What gets my goat about ebook pricing is not VAT or other taxes, but the fact that I'm being asked to pay as much as or even more than I originally paid for the mass market paperback. Having just moved house, and now having less shelf space, and needing to condense 2 libraries into one, replacing print editions with reasonably priced electronic editions is now a necessity.

You'd think that publishers would wake up to the 'long tail' effect. Admittedly, there's an upfront cost of digitising a book not originally digitised, but that surely is more than offset by minimal distribution and marketing costs.

[HarryT]

Originally Posted by maddz

What gets my goat about ebook pricing is not VAT or other taxes, but the fact that I'm being asked to pay as much as or even more than I originally paid for the mass market paperback.

Where do you buy your ebooks from? Certainly on Amazon UK, ebooks are generally considerably cheaper than the corresponding paperback editions.

I'd recommend that you fill in the "Location" field on your MobileRead profile. It makes it much easier to discuss things like this if we know which country you're in.

[maddz]

Sorry, I'm in the UK.

Even on Amazon UK Kindle books are still frequently priced the same as new paperbacks - I think they're doing a direct $ ->£ conversion and ignoring exchange rates. This is of course, when the ebook is available from the Amazon.co.uk in the first place. For example, I can't get some Tanya Huff ebooks from .uk - they're only available on .com (.ca?) and I'm not allowed to buy there.

I often find it cheaper to buy direct from the US publisher; I do this with Wildside Press and Baen (when I'm not using the Baen CD ROMs). Other publishers are more iffy - often I can't buy direct, I have to use their UK equivalent site which usually involves horrible DRM issues and another straight $ -> £ conversion.

Most of my reading is genre fiction, not best sellers so I think there's differences in the pricing model too.

[HarryT]

Originally Posted by maddz

Sorry, I'm in the UK.

Even on Amazon UK Kindle books are still frequently priced the same as new paperbacks - I think they're doing a direct $ ->£ conversion and ignoring exchange rates. This is of course, when the ebook is available from the Amazon.co.uk in the first place. For example, I can't get some Tanya Huff ebooks from .uk - they're only available on .com (.ca?) and I'm not allowed to buy there.

I often find it cheaper to buy direct from the US publisher; I do this with Wildside Press and Baen (when I'm not using the Baen CD ROMs). Other publishers are more iffy - often I can't buy direct, I have to use their UK equivalent site which usually involves horrible DRM issues and another straight $ -> £ conversion.

Most of my reading is genre fiction, not best sellers so I think there's differences in the pricing model too.

I buy mostly genre fiction myself: detective stories and SF/fantasy. Typical price of a new paperback on Amazon UK is £5.99 (list price £7.99). Most ebooks I buy are priced at under £4, although obviously there's the occasional one that's more expensive.

Eg, a few of the books I've bought in recent weeks:

Eight Black Horses, by Ed McBain: £3.49
Iceborn, by Gregory Benford: £2.99
The Case of the Turning Tide, by Erle Stanley Gardner: £2.99
Tom Brown's Body, by Galdys Mitchell: £3.95
Anathem, by Neal Stephenson: £1.19
7 books in the "Poldark" series by Winston Graham: £1.19 each
Let's Hear it for the Deaf Man, by Ed McBain: £0.99
The World of Jeeves, by P.G. Wodehouse: £1.99
The City and the Stars, by Arthur C. Clarke: £1.99

And some a little more expensive:

Matter's End, by Gregory Benford: £4.99 (PB: not available)
The Earth Lords, by Gordon R. Dickson: £4.99 (PB: £13.73)
Late, Late in the Evening, by Gladys Mitchell: £4.68 (PB: £9.99)
The Ladies of Grace Adieu and Other Stories, by Susanna Clarke: £5.03 (PB: £6.29)

So as you see, none has been as expensive as the paperback.

Personally I think eBook prices are reasonable enough. Should a particular ebook be outrageously expensive, I simply wouldn't buy it, although I'm not particularly price conscious when it comes to books.

[maddz]

Unfortunately, £4.99 - £5.99 is the price I paid originally for the US import paperback... I do pick up some ebooks at around that price, but that's the exception not the norm. I keep an eye on the Kindle deals and will snap up books at 99p-£1.50, but anything much more than that has to be an author I will read and reread.

The problem is when you've been collecting for 40+ years, there's an awful lot you can only find at rather silly prices - when they have been digitised in the first place. A lot of books I got back in the 70s just aren't available as an ebook.