VAT to increase price of books in UK and EU, Back to the Future II’s vision of 2015, Public Domain Class of 2015
The Public Domain Class of 2015 – In countries other than the US works by Ian Fleming and Antoine de Saint-Exupéry are entering the public domain along with the music of Glenn Miller.
Of the eleven featured, eight will be entering the public domain in countries with a ‘life plus 70 years’ copyright term (e.g. most European Union members, Brazil, Israel, Nigeria, Russia, Turkey, etc.) and three in countries with a ‘life plus 50 years’ copyright term (e.g. Canada, New Zealand, and many countries in Asia and Africa). – See more at: http://publicdomainreview.org/collections/class-of-2015/#sthash.0u7oHM7c.dpuf –Public Domain Review
Getting Indie Authors Into Libraries – An Interview with Mitchell Davis of BiblioBoard – Robin referenced BiblioBoard in June of this year. The thrust of Biblioboard is that Library Journal will vet self published books and then offer a slate of those self published books to libraries. Libraries pay an annual subscription fee and offer unlimited, multi-user access to patrons. I really don’t understand how the LJ vetting system works but it’s interesting.–Reedsy
Everything ‘Back to the Future Part II’ Got Right and Wrong About 2015, According to Futurists – In 1989, Marty McFly went to the future in Back to the Future Part II. That future was 2015. Newsweek asked a bunch of futurists (I have no idea how you get that title) what the movie got right and wrong. Back to the Future didn’t anticipate email but we don’t have floating cars or hoverboads either. I think dehydrated pizza is right around the corner because there is 3D printing of food. –-Newsweek
Controversial VAT change means e-books are about to get more expensive – I don’t really understand the ins and outs of VAT but it sounds like the price of ebooks will rise 20%. The Bookseller noted that member states can set a different VAT for ebooks if they chose. “France and Luxembourg dropped their digital book VAT rates (to 5.5% in France, 3% in Luxembourg) in 2013 to make the tax charged on e-books the same as that for printed books.”
Any company that sells telecoms, broadcasting or digital services to customers in the EU must adhere to the new rules that form part of a drive to harmonise taxes across the continent and curb the benefits for large companies diverting sales through low-tax states.
The change will have a particularly profound effect on e-books, upon which VAT rates vary widely throughout Europe. Large suppliers such as Amazon and iTunes house their businesses in Luxembourg to benefit from a 3pc rate, while the UK charges 20pc. –Telegraph UK
The VAT thing was legislation introduced Europe wide, six years ago as a mechanism to stop multi-nationals from using tax havens.
Previously, VAT was charged on the country of origin in Europe. That allowed companies to operate from the country that charged the least VAT and ship electronically to everywhere else. All the VAT went to the country that the company operated in.
The new rules change this so that VAT is charged according to the customers country and the VAT has to go to that country. This has put a considerable burden on the small publishers for reasons that I’ll explain in a moment.
The assumption was that the small people would use larger marketplaces, such as Amazon, to do business therefore pushing the burden of the multi-country VAT compliance on to the bigger companies. However, they failed to account (six years ago) for the monopoly effect that now threatens the small guy. Thus they created the VAT MOSS (Mini One Stop Shop) for the little guy to stay compliant with the minimum of overhead.
This has created problems because of VAT registration. While Europe have been pushing for this member compliance at the high level, they have done so without having dealt with the lower level first. Namely the threashold above which a small trader can operate without needing to register for VAT. This level is different in each of the EU member states and in the UK is currently about £81,000 (we are among the countries with the highest thresholds) which means that for a small company in the UK, that operated at, say £70,000, who then sold an e-book to another european state where the threshold was lower, then the company would be duty bound to register for VAT in that country. This is why the MOSS was created and why any company that deals electronically within europe, VAT exemption is now effectively a joke and they have to embrase all the overhead that comes with it.
One of the notable things about this rule is that it deals with companies that takes orders electronically and fulfills them electronically, such as e-books. It does not apply to transactions that are taken electronically, but are fulfilled physically. Whether that excempts the whole company or just the related transactions, I’m not sure. Ring any bells?
A small correction. The law was created and passed six years ago. It came in to effect this year, thus giving member states six years to gear up for the change.
This new VAT regulation was aimed mostly at big companies like Amazon and itunes and like Michelle pointed out, no-one considered the impact it would have on small businesses. I for one am impacted by that and will only do B2B with clients outside Germany. And I know some German eBook-stores that have geolocked thier stores so that only German customers can order from them.
As for why eBooks are now getting more expensive. In European stores the prices are always including VAT. So a price of 2.99 € is always including VAT. Up until now on Amazon that meant a VAT of 3% as Amazon sits in Luxembourg. SO a publisher would calculate the Amazon price with a VAT of 3%.
With the new rule, publishers now have to recalculate for every country (at least every European country) in which Amazon has a store. They either can eat the loss or raise the prices to keep their profit-margin. For example, in Germany the VAT for eBooks is 19% (for print it’s 7% btw) and if the publisher decides to keep the price at 2.99 € (including VAT), the publisher will have a loss of 16%. On Amazon. Other German retailers are a different story.
That’s why so many are thinking about raising the prices slightly. I hope that explanation made sense?
And it seems the VAT rules will simply make Amazon stronger as everyone pulls their books from B&N because selling there makes it impossible to be in compliance with the pricing laws in the EU. Once again, a great job from B&N/Nook. /sarcasm
I wonder if the increase in prices will help indies? That seems the one thing that they competed on in the US early on but have since lost that to trad pubs (or at least with all the trad pub sales, the competition is fiercer)
Indies are thrown into a pool of annoying. Amazon has a way to set VAT-inclusive price for each Amazon store, and shows what the “real price” is, so you can essentially choose how much of the tax hit you’ll eat, but so far, Smashwords just has a “leave your price alone; it becomes VAT-inclusive & you take the hit” option, and an “add tax to the price you set; your books become more expensive” option, that seems to be an overall thing. (I suppose it would have to be, considering they probably don’t have the electronic tools to tell their distributors “so price UK sales at X, US sales at Y…”) Between that and that Amazon /added/ VAT to all indie book prices (so long as it didn’t go over 9.99 VAT-inclusive), indie ebooks are likely going to be more expensive, yes. Especially since Amazon will price match overseas prices now, I hear.
I should probably see if there are more fine-tuneable controls on the individual stores. I don’t know if you can adjust pricing in foreign Apple zones, for instance.
But it’s all very confusing, the tools to adjust prices in different zones aren’t universal, and it is a pain in the rear. And goodbye to any hope of getting my web-page set up to sell audiobooks w/out having to go through Audible… Don’t have any audiobooks yet anyway, at least.
Many smaller businesses (as in one author who sells media from their website) have decided to stop selling themselves and instead sell through Amazon and other retailers.
In a way this law is doing the opposite of what it was supposed to do. Instead of breaking the monopoly of the big players it reinforces it. For the customers it simply means that books become more expensive, that more are sold on DRM platforms and that the platforms books by EU authors are sold will be fewer than before.
Was it Jaws 19 that was playing in that theatre, the one with the 3D hologram that nearly at Marty? While 19 may be too many, I for one think it’s been far too long for a Jaws 5.