Are Kindle books about to get cheaper?
In our ever more digital age, the digital or electronic book is gaining more and more popularity over the traditional printed tome. Last year, Amazon reported that Kindle book sales were outselling hardback book sales, and that demand was continuing to grow.
But electronic books are actually at a disadvantage, tax wise, and a new EU proposal could see the price of electronic books fall by as much as 20%. The villain of the piece, is good old VAT.
You see throughout Europe, printed materials such as books and newspapers benefit from low or reduced rate VAT- in the UK books are actually subject to 0% VAT. However, electronic books, not being printed, are not included in the special class, so are subject to normal standard rate VAT- that’s now 20% in the UK. The situation is the same across Europe- the Germans charging 19% instead of 7%, Spain levying 18% instead of 4% and our dearest neighbours, and fans of the creative type Ireland (anyone still got a sore head by the way?) have a whopping 21% difference.
But for once, the ridiculousness of the system has been recognised, and what’s more, someone might actually be doing something about it.
The European Commission indicated last month that it is reviewing the situation, and may move to allow reduced VAT rates on electronic services. The EU Director General for Education and Culture, Jan Truszczynski, commented “We believe content should be taxed the same way, whether printed or in tablet”.
Hoorah. And a lower VAT charge will mean lower cover prices for electronic books, right?
In theory, of course, this is exactly what will happen, although there has been some speculation that a change to the VAT rules would merely serve to prop up the publishing industry, with sneaky sorts maintaining the same RRP and pocketing the 20% themselves. Surely not...