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Germans Call for Reduced Taxes on eBooks

The US may be blessed with lower taxes on the ebooks we buy (it’s the downside of fewer social services) but most of Europe isn’t so lucky. In Europe ebooks are taxes as a service with 17% to 25% VAT bundled into the retail price (and not the 5% to 12% most EU member countries apply to paper books) and a lot of people are not happy about that.

Bitkom released the results of a survey today which shows that there is strong support in Germany for lowering the taxes on ebooks. Almost nine out of ten Germans (87%) support charging a lower tax of 7% on ebooks sold in that country rather than the full 19% collected on most goods and services.

The results are based on a survey of 2,310 German consumers which showed that only 8% of respondents thought that ebooks should be taxed at a different rate than paper books, and 5% actually took the position that paer books should be taxed at a higher rate.

Bitkom calls on the German gov’t to respond by lowering the tax rate, noting that a recent EU court ruling (C219 / 13-K, dated 11 September 2014)  gave the gov’t leeway to do so.

The topic of taxes on ebooks is becoming a pressing issue as the new year approaches. Thanks to a change in EU tax law, retailers will soon have to start collecting taxes based on where the customer is located in the EU, and not where the retailer is located. The change neatly wipes out what is known as the Amazon loophole, the sweetheart deal that Amazon (and a number of other retailers) secured by setting up their ebook operations in Luxembourg or other low tax environs.

The change in EU tax law is expected to increase the average price of ebooks in some parts of the EU, including the UK, but it’s not clear how Germany and other parts will be affected.

A number of countries have fixed price book laws, including Germany, so the price of ebooks published in those countries cannot go up without direct publisher action. eBooks published elsewhere, on the other hand, might see a price increase. The KDP contract suggests that Amazon may have that power, and their less public contracts with publishers outside of Germany might also grant them some wiggle room on price.

We’ll just have to wait and see.

Self Publishing Bibel

images by pj_vanf


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Daily Links: Germans want reduced taxes on ebooks | The eBook Evangelist November 19, 2014 um 5:23 pm

[…] From The Digital Reader, Germans call for reduced taxes on ebooks. […]

italian November 20, 2014 um 3:38 pm

in italy too there is a new law proposal for applying to ebooks the same (reduced) VAT applicable to paper book, 4% instead 22%. discussion are ongoing on possible veto from EU

Nate Hoffelder November 20, 2014 um 3:43 pm

I hadn’t heard that, thank you.

Ralph Hummel November 21, 2014 um 4:58 am

There is a rather "impressive" type in the articl’es first paragraph that reads "… .Almost none out of ten Germans (87%)…".
Should that not read "… .Almost nine out of ten Germans (87%)…"?

It is however delousinal to think that any government in the EU at present will lower taxes voluntarily on E-books if indeed they practice a higher VAT tax-rate than for the print versions unless taken to court based on the cited EU-high court rulings cited in the article. They are all just too strapped for cash and the consumer through VAT is an excellent cash-cow as individually they bear no weight and it is difficult to get organized in consumer defense groups when you are talking about literally a few cents difference betwen a 20% or 7% VAT tax rate on individual e-book titles.

Nate Hoffelder November 21, 2014 um 6:11 am

Heh. "delousinal"

Ralph Hummel November 25, 2014 um 9:00 am

Yep, caught that too…but too late. Wrote the comment under the influece of not enough sugar in my blood… (/end lame excuse).
I should have written: "It is however delusional…." – Guess my every-day French got in the way!

Nate Hoffelder November 25, 2014 um 9:35 am

Sorry if that came across mean; I just thought it was a funny typo – especially when you corrected my typo.

Malta, Italy to Cut Taxes on eBooks ⋆ The Digital Reader December 9, 2014 um 8:26 pm

[…] ebook tax situation in Europe would best be described as complicated, and thanks to today's news that is only going to be more true next month. The Bookseller reports […]

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