UK e-book prices to rise from 1st January 2015

[JSWolf]

Originally Posted by rkomar

I think the point of the law is to apply the tax based on where the purchaser is. Consider it like a "duty" paid on imported goods. The duty goes to the purchaser's government. The exporter gets taxed at their location based on total revenues and what not, and would factor those costs into the list price.

So are you saying that EU websites should be charging tax in the US? That would be a nightmare as the amount of tax varies from state to state. Also, I have seen where people show as being in a different state based on their IP and they were right at home in their own state. So using the IP to figure out where someone is could cause errors and that's not good.

[rkomar]

Originally Posted by JSWolf

So are you saying that EU websites should be charging tax in the US? That would be a nightmare as the amount of tax varies from state to state. Also, I have seen where people show as being in a different state based on their IP and they were right at home in their own state. So using the IP to figure out where someone is could cause errors and that's not good.

Well, they would probably charge the tax based on your credit card address (or whatever payment means you use). But yes, it would be a nightmare, which is why the author selling from her website is complaining. With physical goods, you just leave it up to the customs agent to calculate the duty and the delivery agent to extract it from the purchaser. With downloads, you don't get that luxury.

[eschwartz]

Originally Posted by HarryT

Yes, welcomed. People like Rizla have been going on for years about how unjust it is that Amazon sell from Luxembourg and charge only 3% VAT as a result. I'm sure he's jumping up and down for joy at the prospect of them being "brought into line" and having to pay the same amount of VAT as UK-based companies.

I am sure Rizla and a few others ARE jumping for joy.

The rest of us haven't been going on for years...

Originally Posted by mr ploppy

Didn't people realise that would be where the money would come from when they first started demanding Amazon and the like pay more taxes? It's not often I agree with Harry, but he's right about this. People should be jumping for joy at the prospect of paying more for their ebooks now they have got what they wanted.

I think most people aren't the ones hyping up Evil Amazon, in fact, the trend here on MobileRead is to applaud Amazon for following the law.

[eschwartz]

This just in right after the global "right" to be forgotten, and the EU trying to break up Google... I think I can see a trend here.

[pdurrant]

Originally Posted by HarryT

I would imagine, then, that she has a plan of action. This change was, after all, announced years ago, so people impacted by it have had lots of time to prepare for it.

It was not 'announced years ago' that it would apply to any automated electronic sales, even for companies whose turnover is under their local VAT registration limit.

[CommonReader]

Originally Posted by JSWolf

The problem as I see it is the EU is trying to force it's will on sites & people who are not in the EU. The EU is overreaching it's authority and that needs to stop.

I suppose you haven't heard of FATCA, the "Foreign Account Tax Compliance Act"? That's a US law which forces financial companies around the globe to invest vast sums in procedures and IT in order to identify US citizens and companies owned by US citizens for the purpose of levying US taxes and reporting these people and their companies to the IRS.
That's just one of the laws the US forces on other countries.

Yet for many posters from the US things are fine and dandy when done by the US, while they turn into an intolerable outrage the very moment they are done by anyone else.

[MikeB1972]

Originally Posted by JSWolf

The problem as I see it is the EU is trying to force it's will on sites & people who are not in the EU. The EU is overreaching it's authority and that needs to stop.

This law is only applicable to people selling from EU member states to other EU member states, you won't be affected.

Selling from / to outside the EU will not be changed (as this is covered by international trade laws so you should pay the import/customs/purchase tax of the country you are in anyway), it's essentially closing a tax loophole for digital goods sold within the EU to non VAT registered individuals (Business to Business sales are likewise not affected).

It's designed to make Google, Amazon et all to actually pay VAT to the government of the country they are selling to, UK individuals/small businesses earning less than the UK threshold (£81,000) will have to register with VAT MOSS if they are selling withing the EU (they won't if they are only selling to the UK) instead of having to track the individual VAT thresholds of individual countries they are selling to (e.g Spain doesn't have one so currently if you sell anything to Spain you need to be VAT registered in Spain, Sweden is about £30,000 - distance selling in the EU is currently very complicated if you actually follow all the tax rules).

If you ship physical goods then nothing has changed.

[fjtorres]

Originally Posted by MikeB1972

This law is only applicable to people selling from EU member states to other EU member states, you won't be affected.

No.
It explicitly states that it does.
Right here:

http://ec.europa.eu/taxation_customs....htm#new_rules

New rules from 2015
From 1 January 2015, telecommunications, broadcasting and electronic services will
always be taxed in the country where the customer belongs*

– regardless of whether the customer is a business or consumer
– regardless of whether the supplier based in the EU or outside

That is crystal clear, no?

[HarryT]

Originally Posted by fjtorres

No.
It explicitly states that it does.

But EU law has no jurisdiction outside the EU, surely? The EU doesn't have the ability to say to someone in the US "you must do something". If I buy something from a company that's not registered in the EU, they don't charge me VAT - it's my legal responsibility to pay it myself. I was certainly under the impression that EU VAT Directives only applied to a business in one EU member state selling to a customer in another member state.

[murg]

Originally Posted by fjtorres

At which point they drag her into court and she spends more in the first lawyer consultation than the website produced all year.

Which court? EU? Her home country? Freedonia?

Originally Posted by fjtorres

4- hope the US DOJ issues a preemptive ruling saying not to comply.

I wouldn't hold my breath for that last one.

Actually the DOJ would never issue such a ruling, as the DOJ doesn't issue rulings.

To generalise, the EU courts would have to find a vendor guilty of not submitting the the VAT, then the EU could either: sue in the vendor's local courts, or try to extradite the vendor to the EU.

[fjtorres]

Originally Posted by HarryT

But EU law has no jurisdiction outside the EU, surely? The EU doesn't have the ability to say to someone in the US "you must do something". If I buy something from a company that's not registered in the EU, they don't charge me VAT - it's my legal responsibility to pay it myself. I was certainly under the impression that EU VAT Directives only applied to a business in one EU member state selling to a customer in another member state.

They have the ability to litigate you to death and they are effectively threatening to do just that. The threat of fines is one they can carry out through the legal system and they are threatening *unlimited* fines.

The power of the state, any state, is the power to coerce.
Traditionally it has been through a monopoly of legal force (armies and policing forces) but modern states also have armies of lawyers (on retainer) at their command.

So make no mistake, if any EU tax collector wants to go after any small or even medium business in the US they *will* get their blood money one way or another. Treaties ensure they'll get their day in court and for many just getting on the docket will put them out of business. And that is before the injunctions start flying.

[murg]

Originally Posted by j.p.s

Well, the mayor of London, England was born in New York City to at least one UK parent and permanently moved to the UK at 5 years age. Now the US wants income tax from him on the sale of a home in England.

This is long standing US law (since the Civil War).

And from what I can tell, it appears that he has been compliant with US tax laws, otherwise the IRS would want, in addition to their chunk of the capital gains on this house sale: at least 3 years of back taxes, and 50% of the maximum balance of each of how financial accounts going back 6 year (in addition to the $100,000 per year fine).

Originally Posted by j.p.s

(And most large "Delaware based" corporations have about as much presence in Delaware as Amazon has in Luxembourg.)

Delaware has no sales tax.

That's why on the Delaware side of the Delaware/Pennsylvania border there are miles of shops. And absolutely nothing on the Pennsylvania side.

[HarryT]

Originally Posted by fjtorres

So make no mistake, if any EU tax collector wants to go after any small or even medium business in the US they *will* get their blood money one way or another. Treaties ensure they'll get their day in court and for many just getting on the docket will put them out of business. And that is before the injunctions start flying.

I find this very strange, fjtorres. I've never heard of anyone being prosecuted for tax evasion that occurred in a completely different legal jurisdiction. I honestly can't see how there is any jurisdiction here: EU law applies within the EU, not elsewhere.

Not saying that you're wrong, though - I know that the law doesn't always work in a way that's comprehensible to us mere mortals.

[murg]

Originally Posted by Little.Egret

Not as such.

But if your state has a sales tax then in the remote future that EU site may charge it and remit to your state treasury in return for your state collecting VAT for the EU for every state site that makes sales in the EU.

There is one problem with this (just one?), Article I, section 9 of the US Constitution:

No Tax or Duty shall be laid on Articles exported from any State.

[fjtorres]

Originally Posted by murg

Which court? EU? Her home country? Freedonia?

Home country.
And no, they do not have to take them to court in the EU first.
People have in fact been sued directly in the US for events outside the country.

It is not uncommon for people or companies to sue or be sued across borders. It is called venue shopping. It is most common in civil cases like libel or business disputes where the stakes are financial.

And the DOJ can issue guidance as to how laws are to be interpreted--a lot of Presidential executie actions are implemented that way. The President tells them how to interpret the existing law and the publishes the guidance.

For details you really need a lawyer and the good ones ain't cheap.

Which brings us back to the coercion issue.