A tax too far! Amazon raising VAT on ebooks from 3% to 20% from January 1st 2015!!

Hello Readers

Well there I was enjoying breakfast as I started to read my emails this morning……then I nearly choked on my cornflakes when I opened an email from Amazon! They kindly informed me that from January 1st next year they will be ADDING a 20% VAT ( Value Added Tax) on sales of any and all e-books I have hosted with them. Apparently this is all due to yet MORE European interference from  the mandarins in Brussels….

On January 1, 2015, European Union (EU) tax laws regarding the taxation of digital products (including eBooks) will change: previously, Value Added Tax (VAT) was applied based on the seller’s country – as of January 1st, VAT will be applied based on the buyer’s country. As a result, starting on January 1st, the list prices that authors enter will include VAT.

Currently the e-book tax rate is set at the standard rate of 3% in Luxembourg where Amazon has its headquarters. So exactly what is our wonderful UK government doing about ridiculous nonsense? Well don’t hold your breath………………………………….

“There is “no scope” to change the 20% VAT rate on e-books, the UK government said this week.

A parliamentary question from Tom Harris, Labour MP for Glasgow South, on whether the government has carried out any assessments of the impact of the e-book market on publishers, authors and readers solicited the following response from the Treasury’s Exchequer Secretary David Gauke: “The sale of a digital book is classified as an electronic service and attracts the standard rate of VAT under EU law. Legal advice obtained by the government indicates there is no scope to change the VAT treatment of the sale of digital book and similar products under EU law. As such, no assessments have been made of the type referred to by the honourable member.”

Gauke reiterated the line that EU law prevents it from lowering the VAT rate on e-books despite the fact that France and Luxembourg have already flouted the rule and Germany is considering lowering VAT on e-books to 7%, as it recently has on audiobooks.”

Source; http://www.thebookseller.com/news/government-no-scope-change-20-vat-rate-e-books

No, I imagine our underworked, overpaid ( 11% payrise this year) and useless politicians are quite delighted to be getting a big slice of the e-commerce pie. Hundreds of millions earned in e-commerce on electronic services like e-books, apps and e-cloud storage are about to be diverted away from Luxembourg. These changes have been purposefully designed to re-distribute revenues away from countries with a low VAT threshold. This will of course impact on companies like Amazon, Microsoft and Apple. It is estimated that the UK and other European governments stand to gain by more than the €700m of VAT revenues that Luxembourg expects to lose every year. Sounds like politicians revenge against  the big corporations to me as they have  been moaning that those big companies dont pay enough corporation tax. So what do they do? They make life harder for the little guy!

So thank you very much politicians for yet another raid on my wallet, its clearly not good enough that so much of my income is taxed already. And for every other Uk  writer out there, welcome to your new and unpaid job – you are now a VAT tax collector even if you did not want to be! Its really nice  to think that all the hard work you put into your writing will now be charged a 20% fee that goes straight into government coffers isnt it…………NOT! And surely its Amazon who are actually providing the service and not us writers? Frankly I dont wish to be the source of such a disproportionate amount of taxation and I am going to have to think very seriously about my future with Amazon. From January 1st 2015 they will be turning us into 20% tax collecting machines…..that is not something I really want to be part of………………………………and the madness of all this is that there is no VAT on printed books!

Ok so what can we researchers / writers / publishers do about  this … apart from having a cry or moan? Well I am compiling a list and do feel free to contribute……

1. Complain like hell to Amazon, we do have a choice as to where we host our e-books. In particular we should have the right set VAT-EXCLUSIVE prices so readers can see where their money is going as Amazon state they will set ALL e-book prices  VAT inclusive. This means the buyer wont know where their money is really going.

2. Write to your local MP demanding to know what the hell he/she/ their party is going to do about this and point out there is an election next year…..yes I know, probably wont make much difference but nothing ventured nothing gained

3. You can investigate self-pubishing your e-books in other ways, I was interested to read the following blog aboout this..


Right.  That’s quite enough for me,  I am  off to the pub…………feel free to re-blog or re-tweet this. Thanks a lot politicians in the UK and Brussels for such a wonderful Christmas present!Bah Humbug!!


About bakersfieldlad

July 2015...... I published my first book on Amazon - "Savilles Spinnney". On April 1st 2015 I published my second book - "Arsenic Sally". Christmas Day 2015 I published my third book " Murder Mystery and Mayhem on the Railways 1830-1899. That's 3 books in roughly 18 months. I enjoy researching and see no reason to stop writing. There will be many many more books and while I would love to be taken in by a publisher I am content to make my books available via Amazon. Keep checking my blogs for updates about my upcoming projects......
This entry was posted in Amazon, e-book, publicity, publishing, tax on e-books, VAT on e-book and tagged , . Bookmark the permalink.

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