Quote:
Originally Posted by pdurrant
Umm… No. If 20% VAT does get charged, Amazon UK doesn't charge publishers 20%, publishers charge Amazon UK 20%.
If UK publishers sell ebooks to Amaozn UK, it would work like this:
UK publishers would charge 20% VAT on the wholesale price of ebooks sold to Amazon UK. The publishers then pay that 20% to the UK government. Amazon UK then reclaims that 20% from the UK government.
Amazon UK then transfers the books to Amazon SARL (or whatever the Luxembourg arm is), which as an inter-EU 'sale' between EU VAT registered entities doesn't immediately attract VAT, but must be reported on VAT returns and tax paid at the appropriate rates. Which is also instantly claimed back.
Amazon in Luxembourg then charges customers throughout the EU 3% VAT, which it pays to the Luxembourg government, which is delighted.
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I'm going to stand by my post. The verb "charge" was a bit of a short cut, but since the VAT is collected by the retailer, the endgame is that Amazon arbitrarily pockets 20% while giving back only 3% to Luxembourg. All publishers can do is increase the price list if they want to preserve their margin, but nothing forces them to. And at a given price, they still lose 17% to Amazon.
ref:
http://www.theguardian.com/technolog...-pay-vat-ebook