EU VAT Legislation for digital products due to change 1st January 2015 - Phil Cox

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Things have been going nicely with e-book sales, I’ve even done some discounted promotions to boost turnover, and they have worked well. My outlook for the New Year was very positive; I was looking forward to promoting Point North & Pedal at cycling events and via social media, then the Amazon e-mail arrived about changes to the taxing of digital products in the EU.

AmazonIn a nutshell, the cost to UK customers who buy my e-book will go up by 17% from 1st January 2015. I have no choice in this; the price structure will be changed automatically by Amazon. VAT was originally applied based on the seller’s country, in this case Amazon. As they have a registered office in Luxemburg, VAT was only 3%.  The EU have now changed things to ensure that VAT is applied based upon the buyers country of origin, in my case that would almost certainly be 20% on all sales given that most of my customers are from the UK.

I have a dilemma now; do I reduce the price of my book to mitigate some of the increase or sit tight and see what happens?  Any reduction in cost will directly affect the royalties I receive meaning the charity ends up with less. I wanted this to be a simple way of raising money for a charity but the increasing red tape will make things a little more difficult to achieve sales. Fortunately for me, I am not trying to earn a wage through writing e-books….

As I sell via Amazon’s Kindle Direct Publishing, the administration is handled by on my behalf; I don’t have to worry about making sure the correct charges have been made based upon buyer’s country of origin. I feel for those who sell e-books directly from their own websites, not only are they responsible for implementing these new regulations, they will have to make significant changes to their on-line store front to cope with them. All of this will cost money to implement; small businesses and authors could well suffer as a result of implementing these new regulations. I guess time will tell.

On a brighter note, don’t waste any more time, buy all the e-books you ever wanted now (including Point North & Pedal of course!) to avoid the tax hike in January! The other alternative is to buy a paperback copy, they are still VAT free (link below).


Point North & Pedal

1 Comment Responses to EU VAT Legislation for digital products due to change 1st January 2015
pcox2014-12-23 08:01:49Reply
Just a test
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