Reducing VAT on e-boooks, to match printed books rates

[Kieran Seymour]

Originally Posted by Kieran Seymour

Just been announced that VAT on digital publications in the UK is being abolished from 1 December.

Update on this: it's been brought forward to tomorrow, 1 May.

[pdurrant]

Thanks! I've moved a couple of my posts to a new thread, with credit to you for the news.

[JSWolf]

Originally Posted by BobC

Or perhaps they will stay the same and the retailers will trouser the 20%.

BobC

I didn't think that would be allowed. That's stealing and it's illegal.

[Quoth]

Originally Posted by JSWolf

I didn't think that would be allowed. That's stealing and it's illegal.

Price setting by producers of Books and Drugs were the last two to be abolished in the UK. A retailer in the UK can charge any price they like. Originally in the UK the wholesalers or the makers could set the retail prices of very many items. Retailers could not charge less or more.

Amazon KDP prices calculated automatically from USD to Euro or Sterling seem to include VAT, thus returning less to the Publisher in countries with higher tax.

I can't remember how Smashwords and Google Playstore works.

EDIT:
There is also an additional complication with cross border sales and VAT inside the EU, depending on the size of the seller and if they also have an office in the destination country.
Also the UK is Transitioning, i.e. they have no EU Vote, but keep EU rules till the 31st December. Also by default, KINDLE ebook sales to Irish addresses (Euro) are from the Amazon UK. As are all sales to Ireland. In Sterling!. You can now switch your Kindle account to USA, but then might not get the UK/Ireland editions of books, and are charged in US$. Also the German site has English, but doesn't always ship to Ireland. Many UK site things don't either and often you don't know till you reach the checkout.
For a Global Company with Market Places in many Euro Zone countries, Amazon treats the Irish consumer very badly. Imagine if they only supplied Canada from the USA and charged in USD.
So for Irish Customers there are bigger issues than the Kindle eBook retail price. Which I don't expect will change for most ebooks from Amazon.co.uk

It's only illegal to claim you are gathering tax and not return it to the Excise people.

[JSWolf]

When the government is not charging VAT, it is illegal to collect VAT.

[stumped]

amazon are not dumb
where a book price used to show a breakdown of the ex vat and the vat element, adding up to , say, £3.99 total. now it just shows the price - still £3.99. but the line saying this includes VAT of £x has done
so clearly they have implemented the change, removing that vat element breakdown, but are keeping the price paid by customer as it was
another big reveal is all the books priced at £x.99
had a vat reduction been applied then should all now be at £y.79. I cant find any like that

[ps67]

And this is not illegal, you can reproach them but it is not illegal. They simply raised the price, so the VAT reduction is to their advantage and not to the consumer's benefit, but there is no law that can force them to behave differently.

[Quoth]

Originally Posted by JSWolf

When the government is not charging VAT, it is illegal to collect VAT.

They aren't, they are just putting the price up. Or in some cases no longer absorbing the VAT cost as some prices inc VAT are currency conversions of prices excluding tax. Because in EU, and some other countries, the retail price legally had to include any taxes such as Excise and VAT (it's 67% for petrol in Ireland adding both and VAT is calculated after duty is added, always). I believe the Amazon.com USA prices exclude any locally applicable sales tax.

So Publishers, Authors and Amazon using Amazon automatic conversions from US$ were already getting LESS income from UK sales than USA sales on eBooks, but the same on paper books! The abolition of VAT restores parity.

Also prices tend to be 1c or 1p less than the next full £stg or $ or €.

I'd be the first to cry foul at Amazon takeovers and business practices, but actually because there was no VAT on paper books and how price conversion is done, the total retail price being unchanged on most UK ebooks on Amazon is quite expected, not unreasonable and not illegal.

Of course some ebooks, especially from the Big Houses, are IMO overpriced. That's a separate issue and there is a thread on it. To charge a high price and have DRM seems a double insult, especially when Amazon doesn't ALSO sell epubs and now has the even more proprietary KFX and no non-Amazon dedicated ereader has Amazon DRM.

The eBooks and paper books should be treated the same. So either both should have had same VAT or none. DRM is NOT about copyright, it's about Corporate control. It's never stopped commercial piracy.

[Quoth]

Actually looking at our books, I see some are priced in Sterling direct and some are US$ conversions. Due to the fall in Sterling, some titles have gone up.
I wish we could set price in Euros and have Amazon convert that to the other currencies, but it's either set in US$ and let Amazon convert or do them individually and update any currencies that take big jumps.

Maybe I should open a thread with a poll. Obviously I need to fix the Amazon pricing!

[Apache]

In the US each State sets and collects it's sales taxes. In Georgia the retail price does not include taxes. Taxes are added at check out and collected by the retailer. The retailer then pays that month's collected sales tax by the 20th of the following month. If tax rates change the retailer makes the adjustment on his end, but it does not affect the retail price.
Apache

[pdurrant]

Originally Posted by Apache

In the US each State sets and collects it's sales taxes. In Georgia the retail price does not include taxes. Taxes are added at check out and collected by the retailer. The retailer then pays that month's collected sales tax by the 20th of the following month. If tax rates change the retailer makes the adjustment on his end, but it does not affect the retail price.
Apache

This is a big difference between the US and EU. By law in the EU, prices advertised to consumers must include VAT.

[JSWolf]

Originally Posted by Apache

In the US each State sets and collects it's sales taxes. In Georgia the retail price does not include taxes. Taxes are added at check out and collected by the retailer. The retailer then pays that month's collected sales tax by the 20th of the following month. If tax rates change the retailer makes the adjustment on his end, but it does not affect the retail price.
Apache

But in the UK, the price includes VAT if VAT is to be collected. So as of today, the price should be lower. A £7.99 eBook yesterday should now cost £6.66. But it doesn't because the retailers are cheating customers. The point of doing away with VAT on digital media is to lower the price. This is done so digital media is more affordable because of the the virus.

So what's happening now is the retailers are cheating the customers.

[stumped]

Originally Posted by Apache

In the US each State sets and collects it's sales taxes. In Georgia the retail price does not include taxes. Taxes are added at check out and collected by the retailer. The retailer then pays that month's collected sales tax by the 20th of the following month. If tax rates change the retailer makes the adjustment on his end, but it does not affect the retail price.
Apache

that's not actually relevant. Value Added Tax is a European invention , with all the complexity of a byzantine euro-committee design - its not a sales tax per se. there's no direct USA equivalent

A value-added tax (VAT) is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale. The amount of VAT that the user pays is on the cost of the product, less any of the costs of materials used in the product that have already been taxed

[stumped]

PS wheras this distinction is a device that lets your accountant charge you double for understanding it

VAT - What's the difference between zero rated and exempt items?
Zero-rated items are goods on which the Government charge VAT but the rate is currently set to zero. The goods covered by this classification are items such as children’s clothes and footwear, water, basic foods, books and newspapers.

Exempt items are goods on which no VAT is paid or charged, but which still need to be recorded on the VAT Return. The goods covered by this classification are items such as land, postal services, health services, betting and gaming.

[Apache]

Originally Posted by pdurrant

This is a big difference between the US and EU. By law in the EU, prices advertised to consumers must include VAT.

In Georgia merchandise is taxable and labor is not. In Florida, labor is taxable. Each state sets their own sales tax laws. Georgia has a state income tax while Florida does not, so Florida looks for more ways to increase revenue.
Sometimes customers, who know better, try to claim that they should not have to pay the sales tax since it isn't listed in the price. Also, in Georgia, it is illegal to tell the customer that if they buy an item you will not charge them or you will pay the sales tax. You can discount the amount of the sales tax, currently 8% here, but you can not tell them they do not have to pay the tax. And each of the 50 states, the District of Columbia and the 5 US Territories.
Apache