Thursday, January 29, 2015

A few thoughts about the new EU VAT rules concerning ebooks

In 2015, the new EU VAT rules on digital services became effective. Since they also apply to ebooks, those new laws changed the reading landscape for EU ebook fans. Mostly by making both ebook pricing more complicated for publishers and often making ebooks more expensive for readers.

This web article describes the UK situation: wordsthatchangetheworld 
and also the situation for sellers outside the EU and for self-publishing authors.

For me in Germany, VAT is 19% on ebooks. (Curiously, it's only 7% on regular books). Since the new rules came into force, I'm generally  paying 19% more for ebooks I order directly from an US or international publisher or through an international distributor. Since those rates of taxes are different for every EU country, I can't even begin to imagine the administrative nightmare that must mean for international businesses catering to ebook-readers in the EU.

Some publishers have already taken appropriate steps; for example Manifold Press (UK), who closed their online shop completely (much to my chagrin; I loved the personal interaction I received with every Manifold purchase) or Amber Quill Press, who no longer sell ebooks to EU customers from their website store.

Of course, as an EU customer, I can still buy books through distibutors like All Romance Books, Amazon and the like, if at a higher price (for which, just to be clear, I don't blame the distributors themselves!) But what if I preferred to buy directly from the publisher who happens to be based outside the EU? What If I happen to like a particular publisher who in consequence of the new laws stopped to sell directly to EU citizens? One of the benefits of digital purchases is just that, getting access to sources of supply I normally couldn't dream of, confined to what my corner bookstore has on offer. I'd never have discovered m/m in the first place had I waited until I could buy the physical books here in my neck of the woods.

Of course, I can still look for books on the website of my favorite publisher. But in order to buy it, I'll have to take extra steps: click over to a distributor's website, log in there, select the book again...

I don't know about you, but the instant gratification of buying an ebook kind of was my main incentive to start reading ebooks at all, and also to stick to reading them almost exclusively. More steps to take means I've got more time to reconsider my buy. I must admit I've already found myself taking a pass on books I was only casually interested in to begin with by the time I arrived at the distributor's website.

And even if my laziness didn't feature in my decision whether to buy a particular book or not, higher prices in relation to an unchanged reading budget most certainly will. I'm certain the same will apply to many other EU ebook buyers.

However, I think who'll be most under stress as a result of the new situation are self-publishing authors. Some platforms (like Amazon's Kindle store) take care of VAT, pricing ebooks differently according to the respective country's VAT tax. That means a self-published author's book will have different prices depending on buyer's country. Irritatingly enough, but what if said author publishes through a platform that doesn't take care of VAT for him? What are they to do - price their books differently per country? Sell at the same price to all, keep track of every single buyer and calculate the respective correct tax deduction (or risk committing tax fraud if they don't) ?

The implications are numerous and open to speculation. I don't know what the new laws will do to the international ebook market in general. All I know, that newest bureaucrat's guff, only effective for a few days now, irritated ME already, and I'm a mere reader who doesn't have much to be irritated about except for having to cut back on her book buying.

Let's see what comes of it in the long run.

1 comment:

  1. Well said! I'm an accountant as well as a reader, author and self-publisher - and I'm in the EU like you! - so I've done a lot of research on the VAT topic. You give a very good summary of the impact. I know there are several campaigns at the moment to try and bring in a minimum level on the tax, but it's really sad to hear direct ebookstores have closed their shops :(


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