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Originally Posted by pdurrant
The price that Amazon charges in all its EU stores (including the UK store) has dropped today to 3% from 15%.
The net effect of this change is that the price of most eBooks in the Amazon Kindle store has dropped (for EU customers) by just over 10%
This change is because Luxembourg has dropped the VAT rate it charges on eBooks down to 3%, the same rate it uses for printed books.
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I was surprised when this happened, because I was pretty sure that the ability to set VAT to the reduced rate only applied to print books, not ebooks.
It seems that after six months, the
EU Commission has finally noticed this too.
Quote:
The European Commission has launched an infringement procedure against France and Luxembourg because the VAT rates they are applying to digital books are potentially incompatible with EU law.
EU legislation allows Member States to apply reduced VAT rates to a limited list of goods and services set out in Annex III to the VAT Directive. Downloading of digital books is regarded as a service supplied electronically, which is not included in this list and cannot therefore be taxed at the reduced rate.
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However, there is unlikely to be any immediate change. There's a long, slow process for bringing countries to task for breaking the rules.