What does a VAT cut to just three per cent in Luxembourg and Amazon's ebook pricing have in common? Cheaper ebooks for us Brits, that's what.
Amazon's EU base of
world domination operations is located in that tiny little country situated between France, Belgium and Germany -- Luxembourg. It's just cut the VAT levied against ebooks from 15 to just three per cent within its boarders. Under current EU legislation, we pay the VAT rate of the country from which we're getting the service -- in this case Luxembourg.
So, with a little luck we'll start to see ebooks come down in price from Amazon, although this tidy little arrangement might not last all that long. Come 2015, the VAT rules within the EU are set to change meaning that you'll pay the VAT rate for the country you're in, not where you're buying something from. Unlike printed books, which are VAT free, the UK currently has a 20 per cent VAT rate on ebooks, matching the general VAT rate. We could see this decrease like Luxembourg however, as other EU member states like France have also decided to cut ebook VAT, regardless of EU laws ruling otherwise.
Considering ebooks are invariably more expensive than a paper copy of the same text -- it's about time they did something to cut the price. I'm not saying authors shouldn't be compensated for the mental blood, sweat and tears they pour into their work; but when an electronic copy, which has no real intrinsic cost past its initial creation and transmission, is more expensive than something that has to be printed, bound, shipped, sold, and then shipped again -- something's not quite right. [FT via TechRadar]