VAT Clarity and Reviews

This statement from the Bookseller clarifies my last post -  The new European-wide VAT law causing digital products - including e-books and apps - to be taxed in the European member state in which the consumer is located, as opposed to the country from which the product is sold will be introduced in January.
The change will stop multinational online corporations such as Amazon and Google from diverting their European sales through low-VAT countries, but small companies fear that the new rules will also hurt sales of their digital products.

So the petition I've signed is an attempt to prevent small companies - read authors as well as publishers - from suffering from this attempt to stop giant companies avoiding tax. Everyone wants Amazon to pay taxes as it should, but this seems an unhappy way to achieve it. Surely the business brains could think of another way? The thought of having to be VAT registered and send in returns is enough to make me consider pulling out of this writing lark.

On another topic I am very happy with the first two reviews I've received for Abduction of the Scots Queen. (Check them out here ) If anyone has the time, energy and inclination to review it for me, please get in touch! The pic is present day Stirling Castle, where Matho has many of his adventures

VAT ALERT!

Usually I find out about new legislation far too late to do anything about it, but this time, thanks to Facebook, I'm up there with the news! There is a fiendish plan afoot to place VAT on digital products - yes, that will mean e-books!

New EU VAT regulations come into force in Jan 2015.

Micro-businesses selling Ebooks direct to customers will forfeit their VAT exemption threshold by doing digital business in Europe.

"From 1 Jan 2015, the new ruling means that should you make a sale to the EU (how one can prevent that with online services is not clear) from the first £1 of revenue your business earns you will need to be VAT registered in the UK and under the VAT MOSS Europe-wide scheme – meaning that you will immediately have to apply VAT to all your services, including those in the UK.

Furthermore, this this means a quarterly obligation to submit VAT returns, increasing the accounting burden significantly; as well as, the cost and complexity involved with meeting the letter of the law regarding the capture and retention of evidence of its customers’ location will bring (which needs to be retained for 10 years)."

In 3 years I have sold less than a dozen books to readers in Europe.

I don't know how I can stop them buying, and I certainly don't want VAT on my other sales in the UK.

Click on the link and sign to petition against it -
https://www.change.org/p/vince-cable-mp-uphold-the-vat-exemption-threshold-for-businesses-supplying-digital-products

Time for Amazon to pay

Pennines in snow

E-book sellers Amazon, Kobo and Barnes & Noble are located in Luxembourg.  In January 2012 France and Luxembourg dropped VAT rates on e-books to 3% so that the tax charged on both printed and digital books would be equal. That might seem fine, but in the UK, the tax on e-books is 20%. Infringement of the VAT rules on e-books distorts the single market and runs counter to the fundamental EU principle of fair tax competition.

Objections were put forward last October but there have beent no changes in the situation. Several Ministers and representatives of both paper and electronic publishing industries have voiced concerns over the negative effect on sales in their domestic markets, and so the EC has referred the matter to the EU Court of Justice.

It is interesting to know that Amazon requires UK publishers to pay most of the 20% VAT charge on e-book sales even though Amazon pays only 3% in Luxembourg.  It is not clear if Amazon passes on such gains to its customers. In going digital, Amazon has avoided the effects of piracy that so harassed the music industry and has no hesitation in admitting that, with all its massive clout, the company seeks the most advantageous arrangements, and is doing nothing illegal (apart from undercutting tax laws. Surely that is illegal?)

Their goal, they say, is to make it easy for readers  to obtain the books they love…and to offer greater access to those books. Well, that's fine for readers, and for Amazon. I suppose it is also great for authors. It is not so great, in fact it is hugely detrimental to UK publishers. It is common knowledge by now that though Amazon generated sales of £3.3billion via its UK website in 2012, it paid zero corporation tax to the UK on profits from that income. Over the last three years, sales have raked in more than £7.6 billion - but no corporation tax has ever been paid on profits.

All I can say is, Remember Starbucks, Amazon, and cough up.
If anyone wants to read a longer article on the subject, here's what the Guardian had to say last October: Pay up