# The European Union gives a big fat middle finger to the ebook industry.



## TWLuedke (Nov 8, 2013)

http://www.wsj.com/articles/eu-court-rules-e-books-are-services-not-goods-1425552050?et_mid=730693&rid=241005945

Add this to the fact they just finished cramming VAT down every online retailer of ebooks across the world, and what I see is a pattern:

European fatcat corporate publishers and their corrupt influence are attacking the ebook industry (indirectly an attack on Amazon), in order to slow the progression of the ebook explosion, which steals directly from their pockets as discoverability is stripped away from them and given to Indies via Amazon's empowering influence on the market.

I'm not an Amazon preacher by any means, I absolutely hate what they are doing with Kindle Unlimited, its ruining the Indie ebook market, but I call foul when I see it.

European fatcat publishers are using legislators to shove roadblocks in front of the digital explosion, hoping to slow down Amazon and Ibooks.


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## TWLuedke (Nov 8, 2013)

carinasanfey said:


> Why, did 'European fatcat publishers' write EU tax laws?
> 
> The ECJ *has* to make rulings in accordance with the EU's existing tax laws; the article you linked to said they're considering changing it, which means that, actually, they're being very considerate of the ebook industry.
> 
> Tax laws exist for complex reasons; changing such laws across the EU is a big deal, and not something to be taken lightly. The ECJ has to take into consideration many different industries and professions.


These tax rates are being "considered," after applying VAT to all online retailers across the world, forcing them into the tax fold. How convenient...

Sure, there are tons of reasons tax legislation happens. There are also tons of influences from large corporate entities on tax legislation. The timing of these two VAT moves, in conjunction with the ebook market explosion across Europe, is really conspicuous.

Then, when you look at the history of EU member countries and publisher organizations, the way they have repeatedly tried to hamper the ebook industry, specifically Amazon...

For a guy who writes fiction, I simply cannot help but see the intricately entwined workings of a potential conspiracy.

But maybe I'm totally wrong. Maybe its all just the ramblings of a fiction author. I can live with that. Still, the conspiracy theory is so much juicier and interesting.


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## Flay Otters (Jul 29, 2014)

There's always a conspiracy.
The only question is whether or not you can see it.

Government is like the mob.
They demand protection money and if you don't pay they beat you up and steal your stuff.
All the while muttering: "Roads and bridges, roads and bridges."


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## Leanne King (Oct 2, 2012)

TWLuedke said:


> These tax rates are being "considered," after applying VAT to all online retailers across the world, forcing them into the tax fold. How convenient...


Er, those online retailers accross the world have always been liable to charge VAT to their customers in the EU. Nothing's changed for them, only the retailers who are based in the EU.


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## Tyler Danann (Nov 1, 2013)

carinasanfey said:


> Why, did 'European fatcat publishers' write EU tax laws?
> 
> The ECJ *has* to make rulings in accordance with the EU's existing tax laws; the article you linked to said they're considering changing it, which means that, actually, they're being very considerate of the ebook industry.
> 
> Tax laws exist for complex reasons; changing such laws across the EU is a big deal, and not something to be taken lightly. The ECJ has to take into consideration many different industries and professions.


This is yet another reason to leave the money-sucking EU! I never voted for it, but my hoodwinked forefathers did in the 1970s when it was JUST a trading organization.


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## Jennifer R P (Oct 19, 2012)

What's changed is that in the past these online retailers could put an EU presence in a country with a low VAT rate and charge only that rate, undercutting local businesses. Amazon, for example, would charge VAT at Luxembourg rates (three point something percent) when some countries have 20% rates.

And ebooks have been legally considered "software" from the start. This has always been the case, so the court hasn't ruled anything important. It requires a change to the law to have them be treated as books. Which I agree they should be, but right now they are not.

This is not news.


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## Vaalingrade (Feb 19, 2013)

Failure at instantly complying with your personal desires does not a conspiracy make. Nor fair taxes a theft.

eBooks are no more special than any other digital good and they're being treated as such.


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## alawston (Jun 3, 2012)

Paranoid nonsense, I'm afraid.

All publishers sell e-books. It's not in any publisher's interests to lobby for higher taxation of those e-books.


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## thewitt (Dec 5, 2014)

Three major things happened here that rocked our world.

1) The EU changed the rules so that VAT rates for online retailers would be charged at the BUYERs destination, not the SELLER.

2) The EU ruled that eBooks are NOT the same as Print Books when it comes to VAT - upholding the 20+ year old classification scheme

3) The EU is FORCING countries who are charging lower VAT rates for eBooks - like France at 5.5% - to raise their rates to match their other VAT Taxed products.

You can decide if this was done to punish online retailers or not, but the changes have definitely impacted sales of eBooks in EU countries.

Small online retailers are simply not able to sell to EU customers now, since the tax reporting requirements are financially prohibitive.


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## Daphne (May 27, 2010)

When is a book not a book? When EU law defines an eBook as an "electronic service" for tax purposes. To be honest, whatever the motives behind this, it does clearly defy all sense and logic.



thewitt said:


> Three major things happened here that rocked our world.
> 
> 1) The EU changed the rules so that VAT rates for online retailers would be charged at the BUYERs destination, not the SELLER.
> 
> ...


Exactly. Likewise, selling pre-made book covers to the EU (also defined as a digital service) makes no sense to me as it seems that the seller has to account for the VAT, which would be a nightmare of administration and accountancy.


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## RA Books (Jul 10, 2014)

Tell me about it  Setting the limit for registration for VAT on electronic services at £0 instead of the same VAT threshold as everything else (£81,000) makes no sense and hits small businesses and sole traders hard. Why one rule for VAT on electronic services and another for everything else? (Yes this is UK Govt. policy - see here)

It effectively forces people to use platforms instead of selling directly or incur the overhead of VAT accounting.


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## Michael Kingswood (Feb 18, 2011)

Umm.....guys.....

In case you hadn't noticed, ebooks have NEVER been books, per say.  In most ebook stores, you do not buy the content, and you never have.  You buy the license to access the content.  Therefore, the court is entirely correct - an ebook IS a service, not a product, because no product actually has changed hands.


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## CoraBuhlert (Aug 7, 2011)

Daphne said:


> When is a book not a book? When EU law defines an eBook as an "electronic service" for tax purposes. To be honest, whatever the motives behind this, it does clearly defy all sense and logic.


It's a stupid decision and one with which almost all publishers, writers and readers in the EU disagree. However, that decision was made approx. 20 years ago at a time when the Kindle wasn't even a glimmer in Jeff Bezos' eye and e-books meant something like Microsoft Encarta on CD-Rom.


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## thewitt (Dec 5, 2014)

Michael Kingswood said:


> Umm.....guys.....
> 
> In case you hadn't noticed, ebooks have NEVER been books, per say. In most ebook stores, you do not buy the content, and you never have. You buy the license to access the content. Therefore, the court is entirely correct - an ebook IS a service, not a product, because no product actually has changed hands.


You don't buy the contents of a print book either. Yes you buy the paper, but I still own the copyright on the content.

The world is changing. The lawmakers need to wise up along with it.

An eBook is not a service. That's utter nonsense.


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## Michael Kingswood (Feb 18, 2011)

thewitt said:


> You don't buy the contents of a print book either. Yes you buy the paper, but I still own the copyright on the content.
> 
> The world is changing. The lawmakers need to wise up along with it.
> 
> An eBook is not a service. That's utter nonsense.


With a print book, you own the physical book, and can do what you like with it. With an ebook, you do not own it or the content - you only purchase a license to access it on your reader. Since you do not have any ownership of an ebook you buy, you have in fact only purchased a service, nothing more.

Read the TOS. The court is only upholding the contract that you, I, and all the other ebook customers out there agreed to.


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## RA Books (Jul 10, 2014)

Michael Kingswood said:


> With a print book, you own the physical book, and can do what you like with it. With an ebook, you do not own it or the content - you only purchase a license to access it on your reader. Since you do not have any ownership of an ebook you buy, you have in fact only purchased a service, nothing more.
> 
> Read the TOS. The court is only upholding the contract that you, I, and all the other ebook customers out there agreed to.


Problem is that every other service requires you to be a corporate entity reaching a certain level of earnings before you register for VAT. Under this digital services rule people have to register and start doing VAT accounting the moment they sell anything to a consumer in the EU - and record where the consumer lives when they buy the item. It's in the laws I linked to above.

Amazon as a platform does it for you, but any author selling their own books directly is affected. The Guardian has a full piece on the implications here.


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## KL_Phelps (Nov 7, 2013)

Flay Otters said:


> All the while muttering: "Roads and bridges, roads and bridges."


and if they ever spent all the money they claim they were going to on roads and bridges, every square inch of the country would be either a road or a bridge


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## ML-Larson (Feb 18, 2015)

CoraBuhlert said:


> It's a stupid decision and one with which almost all publishers, writers and readers in the EU disagree. However, that decision was made approx. 20 years ago at a time when the Kindle wasn't even a glimmer in Jeff Bezos' eye and e-books meant something like Microsoft Encarta on CD-Rom.


Honestly, I'm not sure I see the difference between buying Encarta on CD-ROM and buying an ebook.

How are streaming services like Netflix and LoveFilm taxed? Because they operate in the same way services like KU operate. You pay the monthly fee which gives you access to licensed content for a pre-set, limited term. You're not buying movies. You don't own all those Doctor Who episodes you watched last week.

I'm not sure how digital cable and satellite providers operate elsewhere, but here you can "buy" a digital copy of a movie and... idk, let it sit on your cablebox or something? It's always seemed super dodgy to me, because you don't actually own that movie. You just own the rights to watch it as often as you want, so long as you stick with your cable provider. Buying an ebook from Amazon is the same thing. You don't actually own it. You just own the rights to read it, so long as you keep your Amazon account (which is, to be fair, a much smaller irritation than staying with the same crappy cable company for the rest of your life). But there's always the worry that the title might disappear from Amazon. Then what happens when you upgrade your Kindle, or switch to Android or Apple? You can't take that title with you, because it's no longer there to be re-downloaded. Now, you're stuck with your old Kindle with the broken screen and the button that doesn't work right, just to read that one book again.


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## Jane Killick (Aug 29, 2014)

I read about this on The Passive Voice and my understanding is that this was a legal adjudication by a court. In other words, the existing law was looked at and interpreted. Now we have a clear ruling which makes the law in this area plain.

The article then went on to say that EU ministers (well, France and Luxembourg anyway) were looking at changing the law to bring parity between VAT rates on physical books and on ebooks. So it's not that the EU wants to penalise the ebook industry, it just takes bureaucracies time to catch up with fast moving industries.

Here's the link to the PV article which, in turn, links to the full article at the Wall Street Journal.

http://www.thepassivevoice.com/03/2015/eu-court-rules-e-books-are-services-not-goods/


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## horst5 (Aug 9, 2013)

Flay Otters said:


> There's always a conspiracy.
> The only question is whether or not you can see it.
> 
> Government is like the mob.
> ...


 They also mumble: "For the schools, for the children, for the schools!" When they really mean: "For my retirement account, for my retirement account...."


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## cinisajoy (Mar 10, 2013)

ML,
If you upgrade your kindle, you can get any book you bought the license to sent over even if it is no longer available for sale.  PS: You can get the Kindle app on your iPhone or Android too.


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## CoraBuhlert (Aug 7, 2011)

ML-Larson said:


> Honestly, I'm not sure I see the difference between buying Encarta on CD-ROM and buying an ebook.
> 
> How are streaming services like Netflix and LoveFilm taxed? Because they operate in the same way services like KU operate. You pay the monthly fee which gives you access to licensed content for a pre-set, limited term. You're not buying movies. You don't own all those Doctor Who episodes you watched last week.


Streaming services aren't very big here, at least not in Germany. But both cinema tickets and DVD/video rentals (unless it's porn) are subject to the reduced VAT rate of 7% (full rate is 19%), so I suspect that streaming services will be as well.


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## Nic (Nov 17, 2013)

oakwood said:


> "Under this digital services rule people have to register and start doing VAT accounting the moment they sell anything to a consumer in the EU"
> This is untrue. You can sell any amount of stuff to anyone without having to register for VAT. It's only if you wish to be able to deduct incoming VAT that you need to incorporate it into your accounting.
> 
> Once again... all this is nothing new in many parts of europe.


Wrong. You take in the VAT from the customer, then you have to hand it over to the state. Everyone needs to register and file VAT.


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## CoraBuhlert (Aug 7, 2011)

In general, you have to charge VAT on every service or good you sell, unless it happens to be a good or service that is VAT-exempt such as print books in the UK or stamps in Germany. The seller/provider then hands said VAT over to the state. If you are a business, you get back any VAT you paid on business expenses from the respective tax authority. Only the end customer gets stuck with the VAT and no return.

However, most countries had and continue to have a minimum annual revenue threshold under which a business does not have to register for or charge VAT. In the UK, this threshold used to be quite high. However, under the new rules, everybody selling electronic services has to register for VAT regardless of how much money they make. That's also why so many small businesses are upset with the VAT changes (in addition to the hassle of dealing with the different VAT rates in different EU countries). Because they suddenly have to register for VAT when they didn't have to before.

Now I've been registered for VAT from day one long before I ever made the threshold, because my corporate translation clients require a VAT registration number in order to get their money back from the tax authorities. It's also not that much of a hassle in Germany to register for VAT. But I can see why those who never had to register for VAT would be upset.


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## RA Books (Jul 10, 2014)

We've already dealt with VAT, but we're still not in a position to track the kind of detail they want, e.g. if someone buys an ebook on a ferry, you have to know where the ferry departed from? That is now, word for word, UK tax requirements: HMRC - VAT Supplying Digital Services ). We know too many authors and musicians who are less prepared.

There's a change.org petition underway against the removal of the small business and personal trader allowance. It may not have much effect, but for anyone who wants to sign here's the link:
https://www.change.org/p/pierre-moscovici-a-unilateral-suspension-of-the-introduction-of-the-new-eu-vat-laws-for-micro-businesses-and-sole-traders


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## 75845 (Jan 1, 1970)

RA Books said:


> We've already dealt with VAT, but we're still not in a position to track the kind of detail they want, e.g. if someone buys an ebook on a ferry, you have to know where the ferry departed from? That is now, word for word, UK tax requirements: HMRC - VAT Supplying Digital Services ). We know too many authors and musicians who are less prepared.


If you are quoting the HMRC page you might note that it states, "If you are below the UK VAT registration threshold (currently £81,000) you can register for UK VAT to use the UK VAT MOSS. You can charge and account for VAT in respect of your EU cross-border B2C supplies but won't have to charge and account for VAT on your UK domestic supplies. In addition, you will also be able to reclaim any VAT charged on business expenses directly related to your cross-border digital service supplies." In other words for UK sales you are treated as if you are not VAT registered for UK to UK sales (and of course you cannot claim back VAT on UK to UK sales) despite registering for VAT to access VATMOSS.


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## Guest (Mar 10, 2015)

THIS: There's always a conspiracy.
The only question is whether or not you can see it.

EU doesn't understand yet how best to hide its conspiracies. That's why they're more obvious.


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## Kirkee (Apr 2, 2014)

You mean the thumb, don't you?
The middle finger has no meaning to Europeans.
It's the thumb that's vulgar.

But since the thumb doesn't carry the same connotation over here as
the finger, no need to sweat it.


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## alawston (Jun 3, 2012)

Kirkee said:


> You mean the thumb, don't you?
> The middle finger has no meaning to Europeans.
> It's the thumb that's vulgar.
> 
> ...


Probably worth pointing out that Europe is a dense continent containing dozens of richly diverse cultures. Britain gave the world the two-fingered salute, which probably didn't begin with the battle of Agincourt (but it's a great story). The Capulets of Romeo and Juliet's Verona bite their thumbs as an insult. And so on and so forth. The single mid digit transcends these local foibles, however. Like American Express, it's accepted everywhere.*

*Except, bizarrely, American Express really isn't accepted everywhere.


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## Quiss (Aug 21, 2012)

I don't tend to buy into conspiracy theories but we shouldn't totally discount on Big Business influence on governments. 
The publishing industry over there isn't exactly Big Oil, but on this side of the planet, two wealthy brothers were able to buy an entire political party to shape laws in their favor.
How can we assume this isn't the case elsewhere?


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## Kirkee (Apr 2, 2014)

Andrew, love the line: Like American Express...it's accepted everywhere. LOL!


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## Guest (Mar 11, 2015)

Michael Kingswood said:


> With a print book, you own the physical book, and can do what you like with it. With an ebook, you do not own it or the content - you only purchase a license to access it on your reader.


Correct. This is actually the case with all digital content: books, movies, music. You license digital content. You don't own it. If I buy 100 physical albums, I can leave them in my will to my non-existent children. If I have 100 albums I bought through iTunes, I can't will them to my kids or even transfer the license to them.

You swap convenience for ownership when you buy digital content. You get the convenience of being able to carry an entire library on your phone at the expense of not owning that library.


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## RA Books (Jul 10, 2014)

There's a fairly large update here: http://euvataction.org/updates/

Cameron's announced he's taking it to the EU council, although he's talking to the same people who put this rule in. Hopefully the recent release of US wordpress plug-ins that block EU consumers might highlight the problem.

(EU VAT Action are suggesting businesses that are classed as micro-businesses, an existing classification, should handle VAT purely under their own country's regulations as they did before the change.)


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## Nic (Nov 17, 2013)

oakwood said:


> Sorry but you are wrong. You don't _HAVE_ to register for vat filing. You only register if you want to be able to deduct it. In fact, many people CAN'T register for VAT, either because they have previously p*ssed off the state in their biz bookkeeping, they have tax depbt with the state, or they don't have enough revenue.


This is straight from Wikipedia, as you seem to have trouble taking it from me, applicable to the UK:



> *All businesses that provide "taxable" goods and services and whose taxable turnover exceeds the threshold must register for VAT*. The threshold was £77,000 since April 2012, and since 2013 it is £79,000, by far the highest VAT registration threshold in the world. Businesses may choose to register even if their turnover is less than that amount. All registered businesses must charge VAT on the full sale price of the goods or services that they provide unless exempted or outside the VAT system. The default VAT rate is the standard rate, currently 20%. Some goods and services are charged lower rates (reduced or zero).
> 
> Registered businesses must pay over to HMRC the VAT they have charged on their goods or service (known as output tax) but they may offset this with the VAT they have incurred on goods or services they have purchased (known as input tax).


Once you sell one single electronic item over the internet outside your own country (such as an ebook), even the thresholds become invalid, every single business (aka author selling ebooks) must file for VAT. Given that Sweden has rather high VAT rates ("In Sweden, VAT is split into three levels: 25% for most goods and services, 12% for foods including restaurants bills and hotel stays and 6% for printed matter, cultural services, and transport of private persons.") I seriously doubt they will be happy to have you keep the VAT you take in if you take in more VAT than you spend for your business.

I'm afraid you're mixing up things there. The fact that you initially can file for VAT returns, even though your own turnover is small or in the negative (as can happen when you start a business), doesn't mean filing for and paying VAT to the state is optional. Most certainly not with something like ebooks, where you have practically zero overhead once you have your basic equipment.


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## Flopstick (Jul 19, 2011)

Forgetting about tax for a moment, I can see an advantage to this. (Doesn't mean I agree with it, and I'm not a lawyer, but...)

If e-books are classified as a service which the reader is buying a license to access, then they are presumably _not_ subject to the same ECJ decision as other software. A few years ago (2012 iirc) the ECJ ruled that sales of software via download are _not_ a service, and that customers enjoy the same rights as if they'd bought the physical media in a shop. Not only that, but the sellers have an obligation to facilitate the future transfer of ownership of said software. So, if I purchase something from e.g. Steam, and decide I don't like it or don't want it, I have the right to give it away or sell it on to someone else. (In practice almost no sellers accommodate this, which puts them in direct contravention of the law. Good luck getting trading standards or MPs to pay attention to that though!) If ebooks were treated this way, you could lose readers to a second-hand market of people selling things on once they've read them; and, whereas if you buy a second-hand copy of a physical book you have to accept that it will have aged and degraded slightly, a second hand copy of an ebook would be indistinguishable from a new one.


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## Lucian (Jun 8, 2014)

The EU hates Amazon. They want to punish it. That means they'll punish anyone in business with Amazon. This is where we get whacked.

Our best bet is to convince a husband/wife/son/daughter of a EU president/prime minister/benevolent dictator to become a self-published author through KDP.

Then the author can tell the important loved one to lay off Amazon because whenever Amazon has to pay a tax, a self-published author loses ranking and cries.*

*We'll need a better explanation than my last sentence but you all get my meaning.


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## 75845 (Jan 1, 1970)

Nic said:


> Once you sell one single electronic item over the internet outside your own country (such as an ebook), even the thresholds become invalid, every single business (aka author selling ebooks) must file for VAT.


Incorrect. You do not have to register for VAT in your own country, but you do need to register in any country in which you sell other than your own. Registering in your own country below the threshold is to avoid registering in each EU state. In the UK (uniquely I think) you can register for VAT in order to avail of the VATMOSS provisions that avoids registering in each country but not have to charge VAT for inland sales. Of course that means you cannot claim offsets on inland outgoings. That was a late concession by the UK created in mid December 2014.

So if someone in Sweden cannot register in their own state they could set up an office in Norway and register for VATMOSS there, but could not use it for Swedish sales as VATMOSS cannot be used for any state in which you maintain an office.

DISCLAIMER: I am not an accountant, I am not a lawyer, and I am not Swedish.

https://www.gov.uk/government/publications/revenue-and-customs-brief-46-2014-vat-rule-change-and-the-vat-mini-one-stop-shop-additional-guidance/revenue-and-customs-brief-46-2014-vat-rule-change-and-the-vat-mini-one-stop-shop-additional-guidance


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## Nic (Nov 17, 2013)

Mercia McMahon said:


> Incorrect. You do not have to register for VAT in your own country, but you do need to register in any country in which you sell other than your own.


Not correct, regardless of how often you state it.

If you sell EU-wide you will have to file for VAT regardless of any local thresholds. "File for VAT" is "file for VAT", it doesn't matter WHERE you have to file or whether you do it through VATMOSS or individually, you *have to file*.

If you sell locally only, in the country you live in, you have to file above your threshold. That's not optional and the limit depends on where you live. The threshold can be 0,00 in some countries. Such a threshold doesn't mean you can simply choose or not choose to file in general (which is what the above poster assumed). If you are over it, you will have to do it.


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## RA Books (Jul 10, 2014)

Another quick update. EuVatAction took their case to the EU Parliament in March. There have been international complaints, from across the EU and outside it. The Parliament have stated that they should make an announcement soon, hopefully in May.

In the meantime please tweet to @euvataction if you've been affected. They need as many case studies as possible (or retweet or reply to Claire Josa's tweet here which goes to the EU people responsible: https://twitter.com/clare_josa/status/588417185552412672)


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## Antara Mann (Nov 24, 2014)

I live in EU and east Europe and here the Vat is a killer - for a 9 cents ebook I have to pay 3.59; for 2.99 - 5.99; 3.9 - 7.19 and so on. Some books above 4.99 amd sometimes 3.99 they don't have a VAT. Had been the VAt smaller I would have definitely bought Departure or other bestseller as in my home country the publishers don't bother to buy indies' book rights - only mainstream trad published bestsellers.


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## horst5 (Aug 9, 2013)

Flay Otters said:


> There's always a conspiracy.
> The only question is whether or not you can see it.
> 
> Government is like the mob.
> ...


 You forgot : For schools and children. For schools and children.


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## Lucian (Jun 8, 2014)

To be fair to the governments, if they said, "To line our pockets, to line our pockets," people would be upset.

Okay, maybe that wasn't fair. Doesn't mean it wasn't true.


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## RA Books (Jul 10, 2014)

Another update: apparently the EU are going to make an announcement later in May (the 18th has been mentioned). The proposal is a 100,000 euro limit before cross-border VAT kicks in, but it seems France might block it.

EuVatAction has details here:  4th May update  Vatmoss has been a disaster, with people who have paid being pursued for more, bank transfers being refused, and companies threatened with enforcement and extradition when they aren't even VAT-liable, etc. Basically it's a mess.

If you want to help campaign for changes, please tweet any issues you are having using the hashtag #EUVAT or #DSM Complaints from outside the EU are equally useful. (Opinions help as well...)


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## 75845 (Jan 1, 1970)

RA Books said:


> Another update: apparently the EU are going to make an announcement later in May (the 18th has been mentioned). The proposal is a 100,000 euro limit before cross-border VAT kicks in, but it seems France might block it.


It would be blocked by everyone as it makes no sense outside UK and Ireland which are the only two countries with VAT thresholds that large, although the likes of French and Belgium increased their thresholds since the VAT changes. The UK has already introduced changes to allow those within the threshold to continue acting as if they are not registered for UK sales (and expenses), so the UK has no reason to back this either. That leaves Ireland, which has a UK like threshold but only for goods, not services (which is only slightly higher than France and Belgium).

To illustrate the problem if this comes in a business based in Lille (France) with a turnover between 33,000 and 100,000 euros would be charging customers across the border in Brussels less than customers in France. The business would still need to collect residency information because if the customer is in France then the French authorities are due their VAT. If the business was in Belgium and likely to remain earning between 25000-33000 euros it would be tempted to relocate to France to earn its higher threshold with the added advantage of not having to charge fellow Belgians until 100,000 was reached.

This would also raise objections from non-digital businesses that have a much lower threshold for online sales into EU countries and have lived with that system since 2010 and non-EU businesses that have been charging local EU rates since 2003.

I suspect that there will be a queue of 28 countries lining up to block this proposal.


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## RA Books (Jul 10, 2014)

Mercia McMahon said:


> The UK has already introduced changes to allow those within the threshold to continue acting as if they are not registered for UK sales (and expenses), so the UK has no reason to back this either.


Actually that is incorrect. Under VATMoss, the scheme you mention, those within the UK threshold still have to complete a full separate return for overseas sales. There is no threshold for EU sales, so even if it is zero you have to complete the return (and then pay VAT on any amount above zero).


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## Avis Black (Jun 12, 2012)

If you're a government that wants to raise tax revenue from your citizens, focusing on punishing Amazon and charging a high VAT is a really stupid idea.  

Hypothetically, let's say Amazon has just given 10,000 British citizens a way to publish.  These people either start making an income (if they're not currently employed), or start generating extra income (if they already have another job), all of which becomes taxable.  You've now got 10,000 cottage industries that have sprung up and become revenue generators via income taxes.  Any of these authors who was previously the dole--and had to live off government benefits to survive, or who was a non-working spouse--has now become an income generator adding to the government's coffers.  

So what does the EU do?  It tries to raise the VAT, which suppresses the income those 10,000 new cottage industries make by forcing their products to become more expensive.  Sales decrease, the income of those authors will drop, and the amount of income tax they'll have to pay will drop, too.  So the government actually doesn't benefit from the VAT increase, because they've just harpooned any gain they could have made by decreasing income tax revenue.  

In sum, the EU putting its thumb in its mouth and sulking about Amazon is not sensible behavior for the EU to indulge in if they're watching their finances.


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## Rykymus (Dec 3, 2011)

This is not 'rocking my world.' It's just another small wave in an endlessly turbulent ocean. Costs to consumers go up, costs to consumers go down. I cannot change this, therefore I choose not to concern myself with it. I neither raised nor lowered the prices of my books. If the consumers do not like their tax laws, they can change them.


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## JRHenderson (Dec 4, 2011)

Rykymus said:


> If the consumers do not like their tax laws, they can change them.


Sorry dude, that's not the way the European Union works...



> _A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States.
> 
> A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods.
> 
> A decision shall be binding in its entirety upon those to whom it is addressed._


Imagine North Korea, but with croissants.


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## Rykymus (Dec 3, 2011)

Actually, it is. You just need to have enough people to give a hoot. It's called democracy. Bigger oligarchies than the EU have been toppled by the will of the people, even ones with armies.


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## JRHenderson (Dec 4, 2011)

We shall very shortly find out, Rykymus. The UK is holding a general election on Thursday, which will decide our next government.


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## daveconifer (Oct 20, 2009)

thewitt said:


> You don't buy the contents of a print book either. Yes you buy the paper, but I still own the copyright on the content.


Very interesting observation. I've thought of that in other contexts, but never in this one before. Excellent!


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## TWLuedke (Nov 8, 2013)

RA Books said:


> There's a fairly large update here: http://euvataction.org/updates/
> 
> Cameron's announced he's taking it to the EU council, although he's talking to the same people who put this rule in. Hopefully the recent release of US wordpress plug-ins that block EU consumers might highlight the problem.
> 
> (EU VAT Action are suggesting businesses that are classed as micro-businesses, an existing classification, should handle VAT purely under their own country's regulations as they did before the change.)


Basically, if you're in the EU, I can't sell you anything, be it a product or service, because of VAT laws. So, my ebook store I wanted to setup on my website cannot sell to anyone over in the EU, which has the effect of me LOSING A PORTION OF MY EBOOK MARKET (I can get in there through Amazon and other retailers--but NEVER DIRECTLY).

I guess the main point of my rant was that the EU is making it impossible to sell products or services to anyone in the EU, unless you're a mega-conglomerate corp who is willing to jump through the fiery hoops of VAT laws. The EU has effectively cut off the average Joe from selling online products to its residents.

Now, in light of the functional reality the VAT laws created, you know damn well the mega-corps in the EU are benefiting from the rest of the world being sliced out of the retail market. It doesn't take much of a leap of logic to realize there were some lobbyists involved in making this happen.

Whatever your argument, the fact remains, VAT laws, and their latest interpretations, are restrictive to the point of cutting off commerce, and leaving the market exclusive access to only those who can manage the quagmire of EU VAT.


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## Guest (Jul 2, 2015)

Don't worry, the EU won't be around forever (especially after the Grexit).


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## Patty Jansen (Apr 5, 2011)

TWLuedke said:


> Basically, if you're in the EU, I can't sell you anything, be it a product or service, because of VAT laws. So, my ebook store I wanted to setup on my website cannot sell to anyone over in the EU, which has the effect of me LOSING A PORTION OF MY EBOOK MARKET (I can get in there through Amazon and other retailers--but NEVER DIRECTLY).
> 
> I guess the main point of my rant was that the EU is making it impossible to sell products or services to anyone in the EU, unless you're a mega-conglomerate corp who is willing to jump through the fiery hoops of VAT laws. The EU has effectively cut off the average Joe from selling online products to its residents.
> 
> ...


Some of the sites that handle "direct" payment systems, like Payhip and Gumroad, also deal with the issue of European VAT. So you can still sell direct.


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## 75845 (Jan 1, 1970)

TWLuedke said:


> Basically, if you're in the EU, I can't sell you anything, be it a product or service, because of VAT laws. So, my ebook store I wanted to setup on my website cannot sell to anyone over in the EU, which has the effect of me LOSING A PORTION OF MY EBOOK MARKET (I can get in there through Amazon and other retailers--but NEVER DIRECTLY).


So you are not in the EU that was not clear. In that case the rules did not change for you in January 2015, they changed in 2008. The 2015 change was closing a loophole where the larger non-EU companies could estalish an office in the EU and gain preferential treatment vis-a-vis other non-EU companies. It is also wrong to say that the 2015 changes apply to a product or service as those rule changes relate to a specific range of electronic goods and they do not include bespoke services that require human intervention (e.g., editing or book cover design).


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## TWLuedke (Nov 8, 2013)

Yet again, further evidence of my conspiracy theory that was not well received by Kboards and gang.

http://www.thebookseller.com/news/e-book-vat-holds-back-small-markets-307486

"Charging VAT on digital books is "holding back the development of the e-book market in general, and especially in non-English and small-language markets", the International Publishers Association's (IPA) José Borghino has said."

But there's no collusion here of megacorp publishers with lawmakers, there's no publisher megacorp lobbyists pushing this crap across the EU to suppress the ebook industry. Multibillion dollar publishers who scream that ebooks are cannibalizing their print profits and empowering the Indie revolution would never spend money and influence lobbying to force tax laws that suppress the ebook industry. _Never._

I must be crazy to think this is happening.

I'm just a paranoid fiction author chasing shadows.


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## Mark E. Cooper (May 29, 2011)

This is a handy chart that I like because it say to me, No problemo

https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0CC4QFjABahUKEwj-pYLMr-_GAhUBL9sKHeFgDfA&url=https%3A%2F%2Fwww.gov.uk%2Fgovernment%2Fuploads%2Fsystem%2Fuploads%2Fattachment_data%2Ffile%2F415931%2FVAT_MOSS_Flow_chart_FSB_edit_V1_0.pdf&ei=beGvVb67HIHe7AbhwbWADw&usg=AFQjCNFrvTsEITyAwdiLFI2-zcyM2K37IA&sig2=9KwJxnfgs6ApWVT6t89-ew


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## TWLuedke (Nov 8, 2013)

This quote alone speaks volumes.

Borghino said that "in many countries e-books continue to be subject to an unwarranted discrimination that neglects technological developments."


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## 75845 (Jan 1, 1970)

TWLuedke said:


> "Charging VAT on digital books is "holding back the development of the e-book market in general, and especially in non-English and small-language markets", the International Publishers Association's (IPA) Jose Borghino has said."


This is a different issue to your previous posts, because this organisation is asking for something that has never been done in most of the EU in the history of eBook publishing AFAIK, i.e., have a 0% VAT on eBooks. If you sold a book via Google your customer was paying 23% Irish VAT until 2015. Now they pay less in most countries as Ireland was one of the highest VAT rates (I live in the UK and now pay 3% less for Google Play books). So your comment is a little confusing as this is different issue to your previous comments about direct selling from outside the EU. O% VAT on eBooks across the EU would make accounting a lot easier for direct selling self-publishers, although it is unlikely to happen.


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