European Readers to Pay 17% More for eBooks in 2015

taxI hope you’ve been savouring that deliciously low 3% tax on your ebooks because from New Year’s Day EU ebook buyers will be paying at least 17% more in VAT.

The new [EU] VAT laws will prevent Amazon, Nook and Kobo from getting away with charging a paltry 3% tax on eBooks, magazines, graphic novels and newspapers sold to European countries, because their headquarters are in Luxembourg . . . UK customers will have to pay the 20% VAT on eBooks from Amazon, instead of the 3%. This will increase eBooks accross the board by 17%.

The Luxembourg government stands to lose around €800 million a year from the ruling, while the UK and Germany stand to gain around €350 million each by the higher VAT rates.

Here are the 2015 VAT rates of EU countries.

One way to avoid paying that extra tax is to use a VPN, although this may not work with Amazon:

If you have never heard of it before, a virtual private network (VPN) allows users to make some small changes to their modem and router. It basically allows you to change your local internet address in your home country, to another. If you live in the UK for example, you can establish a VPN to Luxembourg, and only pay 3% VAT on all of your e-Books.

No VAT is paid on dead tree books in the UK so obviously this is good news for those retailers because that horrible phenomenon where ebooks are priced at the same or higher price than the print version, will worsen. Today I ordered the hardcover edition of The Original Folk and Fairy Tales of the Brothers Grimm: The Complete First Edition translated by Jack Zipes at £16.97. The Kindle edition is currently £15.97, but in the New Year it’ll be more expensive than the hardcover.

The Original Folk and Fairy Tales of the Brothers Grimm Jack Zipes

While this change benefits traditional publishing, it also hurts indie and self-published authors. More expensive ebooks means either absorbing the increase by lowering prices, or risk fewer sales, as readers are going to be more inclined to choose the cheaper print over electronic content.

image credit: iosphere

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3 thoughts on “European Readers to Pay 17% More for eBooks in 2015

    1. Definitely. I don’t think the various governments will make as much money in VAT on ebooks as they think they will. And some people don’t have a choice over the format in which they read, which limits their options.

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