Thursday, December 22, 2011
Santa Delivers VAT Present?
The rules on VAT on ebooks is about to become very interesting. In 2015 EU consumers will pay the VAT rate based on the country they live in, but until then and under the current EU rules, European consumers pay VAT based on the country the vendor is based. The spanner in the works comes not from the UK, France , Germany but from the European home of Amazon, Luxembourg.
Some will question what difference this makes to retailers and whether Amazon pricing just got very competitive and attractive. The difference between the UK and Luxemberg will be a massive 17% and 2015 is a lond way off in ebook years!
However there are opportunities in this for publishers as well as consumers.
Today many price their book as VAT inclusive, but if they were to price them VAT exclusive then the VAT difference of 17% could be up for grabs with some creative juggling. One major European publisher recently changed its pricing terms with Amazon to take advantage of this opportunity.
Interesting times and an early Christmas present for some and maybe the act that will force the some countries to think twice about their high tax rates on ebooks and the great gulf between reading the same material on two different platforms.
Techradar source document