Quote:
Originally Posted by JSWolf
Does this mean that Amazon won't be having lower eBook prices? Customers won't know that Amazon's VAT is not UK. All they will care about is that prices have not gone down. If it
s true that Amazon's VAT is not UK VAT then Amazon will have to eat the VAT or piss off a lot of customers.
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VAT on electronic goods is charged at the rate at the customer's location, not the supplier's.
Whether Amazon are selling to the UK from their UK subsidiary or their Luxembourg subsidiary doesn't matter. There is no longer a VAT component in the prices.
For example, if a business bought a ebook reference in April for £120 (=£100 + £20 VAT), they could reclaim the £20 of VAT paid to Amazon on their next VAT return. The same book bought in May for £120 (=£120 + £0 VAT) and they would not be able to reclaim any VAT, because no VAT was paid.