Slashdot Mirror
Amazon Overcharging Publishers For Tax
00_NOP writes "Amazon is taking fire in the UK for insisting that publishers pay them for 20% VAT (sales tax) when in fact the online retailer is only paying 3% VAT. 'The firm is able to wield such power over publishers because it has a near monopoly of the UK digital book publishing market. According to reliable estimates, it sells nine out of 10 ebooks in the UK, while using its Luxembourg tax status to wring more profitable terms from publishers. ... In private, British authors and publishers express fears that Amazon's dominance will send the industry into further decline.' Given that the Kindle is rubbish at displaying maths and science and that Amazon is as dangerous a monopoly as Microsoft ever was, is it not time that regulators and consumers stood up to them?"
Amazon is also facing criticism right now for allegedly shutting down a woman's account and remotely wiping her Kindle, then refusing to provide information about why it did so.
that which can be adequately explained by stupidity.
Overcharging, potentially illegal actions? Pfft, who cares.
Whats that, you say its bad at displaying maths and science? Someone get the firing squad.
Seriously, what on earth do its shortcomings have to do with whether the government needs to take action?
Surely this is merely a matter of tax laws that lawyers and judges are perfectly well equiped to solve?
If Amazon is a Luxembourg company, than this should be no different from any other Luxembourg company buying and selling products outside Luxembourg borders. Europe has tax laws in place regarding intra-community trade; neither Amazon nor the publisher's opinions matter.
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What does the kindle's failure to display math and science symbols correctly have to do with Amazon potentially being a monopoly?
I am almost-buyer of Kindle and practically all I need from it is science and math... Thanks for tips, and I hope this is read widely. Maybe next year, or decade... But not before all devices are updated to normal-math, acceptable-tables and acceptable-pdf.
There is another problem I was already aware of - PDF display is, by default, _awful_. I understand why's but I think it is not acceptable at all.
http://opencm3.net, http://www.nongnu.org/gm2/
* http://www.defectivebydesign.org/amazon-kindle-swindle
* http://www.gnu.org/philosophy/the-danger-of-ebooks.html
The better question is why are ebooks subjected to VAT in the first place when printed books are not.
http://www.thebookseller.com/news/uk-government-holds-firm-e-book-vat.html
in a written response reiterated the government's position "Under EU law, VAT on electronic books must be charged at the standard rate. A reduced rate cannot be applied to digital or electronic supplies, or supplies of text via the internet, as they are classed as supplies of services rather than physical goods. There is therefore no scope in the principal VAT directive to apply a reduced rate on e-books."
And I thought I was just being paranoid about this sort of thing.
When Amazon first went around deleting books off of people's Kindles I vowed I'd never buy one. Now it appears my apprehension was all too justified.
I hear the Nexus 7 does a better job with pdfs than the Kindle. It appears to me that's the way I am headed.
"Amazon is also facing criticism right now for allegedly shutting down a woman's account and remotely wiping her Kindle, then refusing to provide information about why it did so."
This is the exact reason why I strip the DRM from every Kindle book I buy and then store them in my own offline repository. Should Amazon ever decide to wipe my account I'll still have the books I purchased. The other advantage is I can use any e-reader I want w/o being locked to a Kindle.
So if this story is true as stated, and she has bought lots of e-books from Amazon, will Amazon refund her all the money she's spent on them? Or does Amazon just 'absorb' that $$$? I'd sue Amazon for actual damages, court and lawyer fees and damages. I can see the future of e-commerce, and this a bad trend starting here.
Having been totally baffled by the summery. Which is incredibly confusing. Nothing has changed, VAT works like it always does the final customer pays it ALL thats the books buyer paying 20% http://www.amazon.co.uk/gp/help/customer/display.html?nodeId=502578.
This is purely about dodgy maths. Amazon make deals on percentage of Gross Price with the publishers the UK full retail price of the book [net price+20%vat], not on the net price + [Vat in Luxenbourg] 3%. where publishers would get a slightly larger piece of pie . Neither Amazon or the Publishers pay a penny in tax so I fail to see why this is an issue. A better argument would be to standardise of Amazon taking a percentage of the net price as opposed to gross price, but all this should not matter, its really whatever they have negotiated between themselves.
This is a ridiculous Anti-Amazon article, I suspect to distract from the disgusting behaviour that Apple and 5 Publishers are involved in
This is not only a problem for publishers (which pay 20% instead of 3%) but also for the equivalents of the IRS. Amazon is paying a lot less taxes than it should in other countries by leveraging that extra 17% in two ways: benefits, and gaming the input/output VAT.
No that is not what is happening the Publishers pay Nothing; Zero; Zilch; Nada; Nothing. Amazon also pay Nothing; Zero; Zilch; Nada; Nothing. The *Final* customer pays the standard rate which is 20% in the UK and the Government gets it ALL.
VAT does not work like you think it does. Businesses do not Pay VAT.
Isn't it fraud to charge somebody for a tax then not pay the money to the government? This is true whether they really owe 20% and pay 3% or owe 3% and lie to customers they need to collect 20%.
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
...You do realize that PDF is meant for printing. The P in the acronym kinda gives it away....
So, the 'P' in PDF, which stands for 'Portable Document Format', is supposed to remind us, somehow, of printing?
Does the 'G' in Gif somehow remind us of giraffes?
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cheers,
As another comment linked to an article: Vat by EU law is 20% for ebooks.
This is wrong. EU requires that VAT for ebooks is the same as the standard VAT, whatever that is in the particular country where the book is "published".
In 2015 the rules will change, and it will be the country of the buyer which determines VAT (as it is for everything else), and then it will all be academic.
Finally! A year of moderation! Ready for 2019?
Amazon is doing something shady and it'll get worked out in court now that it's know[n].
Oh yeah, just like Vodafone and the billions of pounds they avoided paying in tax. In the UK the politicians let big firms get away with crap like this and the Facebook tax dodge in the mistaken belief that it brings jobs to the country. All it does is line the pockets of a few at the cost of a huge amount of tax revenue taht could be used to finance real investment.
Small companies are generally not VAT-registered, and therefore have to pay the tax.
But in general you are correct; businesses on the whole avoid paying VAT even when they provide no discernable "value addition" to the product or service. Perhaps if each intermediate business had to pay 1% VAT we'd see a reduction on the number of middlemen and shell companies.
No Small companies are almost always VAT registered, you have to have a turnover of less than £77,000 which excludes all but sole-traders, and even then they have a tendency to be vat registered if they do work for businesses.
http://www.hmrc.gov.uk/vat/start/register/when-to-register.htm
It would have to be a very small company then. I run a one-man-band ltd company in the UK, and it is VAT registered. Having a VAT registration is very often a requirement from customers, and it is needed if I would want to reclaim VAT paid on goods purchased (which I dearly want to, otherwise it would come straight out of my margin).
There is nothing strange or new here:
* VAT works as it is supposed to do (you pass it on to your customer).
* A (near) monopolist is taking advantage of their strong hand. Could be something for the regulators to look into.
* Guardian journalists showing that having a clue is not mandatory.
How do we know that this story is actually true, and not just some BS made up by someone who has an axe to grind with Amazon?
If you disagree with me on social issues, then it's pretty clear that you are a narrow-minded bigot.
"If it's a choice between paving the way for tyranny and risking the loss of your digital life at the press of a button by some deceived customer service rep, and having to remember a password, I think the password is the way to go. The former works better, but the latter fails better. A note to anyone from Amazon PR contemplating sending me a comment regarding this: I expect that any comment from Amazon regarding this story will disclose whether and when Amazon can delete files (including files loaded by users) from Kindles, and whether DRM-free files can still be deleted. Also: as a policy, I do not quote anonymous spokespeople for firms unless they are telling me something that could cost them their jobs."
I bought a kindle about a month ago, and use it exclusively to read math and science. I'm a third year physics student, so most of the content is full of greek letters, mathematical notation, and stuff like hats and bars on letters. Of the 30-40 documents I've tried to read on it so far, I've only stumbled on a single document with a rendering error (where e^(-E) has the exponent pushed into the base number)...
VAT does not work like you think it does. Businesses do not Pay VAT.
Sorry pal, but that's not how VAT works.
There is input VAT and output VAT.
Businesses do pay VAT, except for later they "cancel" it thanks to the input/output VAT compensation.
But that's only if input VAT and output VAT are at the same percentage. If you are paid 3% VAT by Amazon but you have to pay 20% VAT to IRS, then you are in trouble. That's exactly what publishers are complaining about.
So that is piracy of services what goes on the internet, not piracy of products as far as the EU is concerned. I wonder what would be the consequences of this definition..
VAT does not work like you think it does. Businesses do not Pay VAT.
Sorry pal, but that's not how VAT works.
There is input VAT and output VAT.
Businesses do pay VAT, except for later they "cancel" it thanks to the input/output VAT compensation.
But that's only if input VAT and output VAT are at the same percentage. If you are paid 3% VAT by Amazon but you have to pay 20% VAT to IRS, then you are in trouble. That's exactly what publishers are complaining about.
I'm not your PAL. Your absolutely right that that there is "output vat" and "input vat", the business gives the *difference* to the government. The Final Customer Pays ALL the VAT!!! The other businesses just collect chunks of it along the way :) hence the *Added* bit. VAT does not work like you think it does.
The Publishers are complaining they are getting a smaller piece of the pie after discounts have been negotiated, as they are worked out on 120% of the net price not 103% of the net price. Try the maths yourself. Again neither the publishers nor Amazon pay a bean in VAT. Its about dividing the net cost!!