10-22-2012, 07:03 AM | #1 |
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Amazon pockets VAT paid by UK publishers
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10-22-2012, 07:35 AM | #2 |
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No... can't be right... according to many people here (who I believe and trust totally) Amazon is our friend, only here to provide us with books on a charitable basis... and would never take advantage of their dominant position and act in a predatory fashion let alone manage to avoid paying tax in countries where they do business...
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10-22-2012, 07:54 AM | #3 |
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I had seen a tweet about that article but, reading it just now it sounds like utter garbage. Of course Amazon are excluding the VAT from their cost prices, why would anyone not do that? Why on earth would they allow the publishers to charge them more because they are paying a lower rate of VAT? It's only agency pricing that stops them passing on any of that cost saving to the consumer.
They aren't "pocketing the VAT" - I imagine that would be massively illegal - they are simply making more profit by avoiding the UK rate, which was surely the point of the whole Luxembourg scheme. I might find that objectionable, but I don't see any new information here. It seems like a bit of corporate mud-slinging, to me. |
10-22-2012, 08:15 AM | #4 |
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All the companies want to earn profit. Some do it by providing better services resulting in more sales, paying less taxes by the using the loopholes that are created by governments. Others do it by forming illegal price fixing schemes, erecting more barriers to protect profits (read DRM, geo restrictions).
Instead of turning it into yet another Amazon v/s publishers’ thread, we can wait and see any of the government agency acts on it. Otherwise, it is simply a mudslinging exercise as DrNefario has put it. |
10-22-2012, 08:32 AM | #5 | |
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10-22-2012, 09:35 AM | #6 |
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If publishers don't like Amazon's terms, they should pull their books. Sell via other book stores who will now have books Amazon does not. Sell the books DRM free and provide an email to your kindle option along with instructions on how to authorise an email address then you can still target amazon customers.
Will Amazon pull print books in retaliation, maybe. However, if this is common for all publishers to be squeezed, once one makes a stand, I imagine others will start to follow. Just don't collude to do whatever you intend to do Easier said than done I know and a publisher may take a significant loss by pulling out of Amazon, then again, what's the saying about putting all your eggs in one basket? |
10-22-2012, 11:15 AM | #7 |
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I think that's the problem, isn't it? That there is only one decent-sized basket, and Amazon own it.
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10-22-2012, 11:25 AM | #8 |
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In the UK paper books are zero rated (0%) for VAT so that's not what's going on.
Since the Guardian's writer hasn't heard of the MFN "no ebook underselling" terms of Amazon they probably know still less about the esoterics of VAT. Note that since the publishers are UK based they might have to charge 20% at some point. However, since all this suggests the publishers can get better terms by going indie and taking the KDP T&C, why don't they do just that ? Because it's NOT TRUE perhaps. |
10-22-2012, 11:47 AM | #9 | ||
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10-22-2012, 12:27 PM | #10 | |
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10-22-2012, 01:44 PM | #11 |
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I thought under the Agency scheme Amazon is only the delivery mechanism receiving a 30% commission. The UK publishers are the retailer of ebooks and you are purchasing the files from them.
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10-22-2012, 05:50 PM | #12 |
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10-22-2012, 06:25 PM | #13 | |
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And for other comments, what does Agency Pricing have to with anything... half of the pubs have already settled and have no Agency Pricing any more plus selling a license is equally subject to VAT - it makes no difference whether you purchase an eBook or a license for one, they're both subject to VAT in the sales source country... Last edited by elcreative; 10-22-2012 at 06:29 PM. |
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10-23-2012, 02:38 AM | #14 |
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Agency pricing doesn't seem to have gone away anywhere in the UK, from what I can see.
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10-23-2012, 03:23 AM | #15 | ||||
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It seems odd that a random nobody with no negotiation power can get 35-70% royalties, but the large publishers can only negotiate royalties of 8-10%. If that's true, they might want to seriously consider using KDP. |
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