Indie digital publishers (EU) now have to register for VAT – mandate from Europe – And it is big publishers like Amazon that are going to benefit, not us



Source: Balajimuthazhagan via Wikimedia Commons

Or, maybe it should say: “…and we’re All Done!”

A new article in the Telegraph (UK perspective), yesterday, highlights what this new legislation means for any artist/small business selling/distributing their digital media: It’s a MESS! And it turns out that Amazon and other big corporations are going to be the winners in all this – not you and me folks!

“…This new VAT procedure was intended to prevent internet giants such as Amazon from avoiding paying VAT by basing themselves in Luxembourg. Instead of this intended effect, the new rule is in fact going to make complying with VAT so difficult that the only way to sell e-products will be to sell via large platforms like Amazon or Apple – who can hire enough lawyers to make the red tape of more than two dozen nations make sense and code an app on their website to calculate the amount payable correctly.

Thus, it’s doubly incompetent – not only are the EU crushing small producers, they are reinforcing the monopoly of US online giants they intended to break.

Even worse, they intend to expand the scheme to cover all online shopping, even for physical goods, by January 1st 2016; so this might be one of the last Christmases where you can shop at micro businesses online.

However, it’s not too late to act – today the government is being lobbied in the hopes they will act sensibly and prevent these rules from coming into force in the UK. From 10am today, the UK action group is going to try to make as much noise as possible on social media on the hashtag #VATMESS – particularly aimed at treasury minister David Gauke MP – in the hopes the UK government at least will see sense.

It’s incompetence on a truly grand scale by the EU to fail to realise that by removing VAT thresholds, they’ll wreck whole industries. The solution – letting the thresholds remain – seems simple. However, it does raise the question: how on earth has it come to this? The EU is supposed to create free trade across Europe, and instead it’s bent on throttling e-commerce with red tape, massively reducing consumer choice. It’s at times like this that I can’t help but feel we’d be better off out.

Below is a copy of E-mail from Kindle (Amazon) regarding new legislation from Europe where, all digital media (including E-Books) will be registered for VAT.  Now, that is bad enough for Indie (independent) music and writers who are using the big publishers, distributors and aggregators such as Amazon to publish their creative masterpieces, it means that the pricing has to now include VAT, but on reading around this legalisation (due to kick in Jan 1st 2015  – a few weeks from now), it will really hurt indie publishers who publish their own work and distribute it directly from their own platforms, websites etc. They will have to register for VAT in order to keep going. The control of creativity and production consequences of this are profound, not to mention the paperwork and the cost and hassel. Personally I see it as yet another attack (via the backdoor) of creative free internet use and sharing.

Anyway, below is the copy of the email I got from Amazon Kindle this morning. The upside for me personally is that as I was writing this blog, I got a delivery of my real physical books (proofs) the Epigenetic Caterpillar: An Alternative to the Neo-Darwinian view of the Peppered Moth Phenomenon, Santa came early this year, and it made me realise the value of the physical  format – the paperback book that you can hold, smell, touch and feel. But reading the above article, it seems that they are going to come after the physical products too. So, folks, be prepared for the full control of digital & all other creatively produced media and just keep creating  in-spite the buggers.


“Reminder: How EU VAT changes affect your eBook pricing Inbox x Kindle Direct Publishing <> 8:20 PM (17 hours ago) to me Hello, This is a follow-up mail to remind you of the upcoming changes in European Union tax law and what this will mean for your books in Kindle Direct Publishing. On January 1, 2015, European Union (EU) tax laws regarding the taxation of digital products (including eBooks) will change: previously, Value Added Tax (VAT) was applied based on the seller’s country – as of January 1st, VAT will be applied based on the buyer’s country. As a result, starting on January 1st, KDP authors must set list prices to be inclusive of VAT. We will also make a one-time adjustment for existing books published through KDP to move from VAT-exclusive list prices to list prices which include VAT. We’ll put these changes into effect starting January 1st; you may always change your prices at any time, but you do not need to take any action unless you wish to do so. One-time Adjustment for Existing KDP Titles: Starting January 1st, for any titles already published in KDP, we will make a one-time adjustment to convert VAT-exclusive list prices provided to us to VAT-inclusive list prices. Subject to minimum and maximum thresholds, we will add the applicable VAT based on the primary country of the marketplace to the VAT-exclusive list price provided. For example, if an author had previously set £5.00 as the VAT-exclusive list price for, the new VAT-inclusive list price will be £6.00 because the applicable VAT rate in the UK is 20%. Please note, if an author had set a consistent VAT-exclusive list price for all Euro based Kindle stores, those prices will now be different due to varying VAT rates for the primary country of each Kindle store. For example, if an author had previously provided a €6.00 VAT-exclusive list price for,,, and Kindle stores, the list prices including VAT will be €7.14 (19% VAT), €6.33 (5.5% VAT), €7.26 (21% VAT), and €7.32 (22% VAT) respectively. Minimum and maximum list prices for the 35% and 70% royalty plans will now also include VAT. For books published before January 1st that would fall outside these new limits after VAT is included, we will adjust the list price to ensure the book remains in the same royalty plan that was previously selected. Learn more about the new minimum and maximum KDP EU list prices: Royalties will continue to be calculated based on the list price without VAT. The amount of VAT applied depends on the country where the customer is located. Consider a book with a £6.00 VAT-inclusive price on, for sales to customers in the UK we would apply the UK’s 20% VAT rate and the price we use to calculate royalty would be £5.00. The 23% Irish VAT rate will apply to purchases from Ireland, so a customer buying from Ireland would still see £6.00 but, applying the 23% Irish VAT rate, we would calculate royalty based on the VAT-exclusive list price of £4.88. Learn more about how EU prices affect royalty payments: eBooks available for pre-order, scheduled to release after January 1, 2015: For pre-orders placed before January 1, 2015 on books that will release after January 1, 2015, we will pay your royalty as though VAT were still only 3%. eBooks scheduled for a Kindle Countdown Deal: If you currently have one or more books scheduled to run a Kindle Countdown Deal in the UK marketplace during or after January 1, 2015, your book will still be eligible to finish that promotion, even if the list price does not fit the new requirements of being priced between £1.99 and £15.99, including the VAT. Setting List Prices for EU Kindle stores: Starting January 1st, to make it easier to set customer friendly list prices without having to calculate VAT for each country, authors will set list prices for EU marketplaces that include VAT. To accommodate this, the KDP pricing grid will be updated to accept VAT-inclusive list prices. Previously, if an author wanted to provide a suggested list price of “£1.99”, he would have to set “£1.93” as the VAT-exclusive list price to account for the 3% VAT we would have applied. Now, authors can simply enter “£1.99” and we will deduct the applicable VAT to calculate royalties. In the pricing page, authors will also see their suggested price without VAT displayed for the primary country of the marketplace to help them understand how royalties will be calculated for sales to customers from that primary country. For those authors who set their EU marketplace prices automatically from their US list price, we will convert the US list price to local currency and that will be the list price that includes VAT. For example, if an author sets the US list price to be $10.00, then we will convert that price to Euros for the German marketplace, and assuming the exchange rate is 0.8, the list price including VAT will be €8.00. For purchases in Germany, we would deduct 19% VAT and calculate royalty on a VAT-exclusive list price of €6.72. Learn more about setting list prices for EU Kindle stores: As always, if an author list books with a lower list price on other sites, we may price match those books to the lower prices. We recommend authors review their list prices that include the new VAT on January 1st when these changes go into effect to determine if they want to make any updates. We think that respecting your VAT-exclusive list prices and keeping books in their chosen royalty plans offers the best experience for authors. If you would like your books to be handled in a different way, contact us with your feedback: Best Regards, Kindle Direct Publishing Team”.


Keep Creating


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