If you live in the UK or any of the EU countries and are in
the habit of buying digitally provided services, then this post is for you. It
doesn’t matter what you buy, whether it’s music, ebooks, software, apps, films,
games, screensavers, even crochet or knitting patterns, I could go on for ever,
then you have been paying more for them from the beginning of this year. In
fact, anything you download from the internet to your computer, mobile phone,
android tablet or iPad etc, is now costing you more!
The reason for this is quite simple. It’s the new EU VAT
rules on the supply of electronic services to the consumer, that’s you.
The implementation of this legislation has caused a storm of
protest from the suppliers of these services, many of whom have stopped trading
because the rules are so onerous, so, apart from paying more for your knitting
or crochet pattern, or your specialist software, you may find your favourite
seller is no longer trading. And while you, as a buyer, are only affected if
you live in the UK or EU, sellers worldwide have been affected by the changes with
which they must comply, or risk penalties for non-compliance. But enough of the
sellers, because this post is intended for you, the buyer.
The EU brought in this legislation to crack down on the big
conglomerates like Amazon and Apple, who register in Luxembourg so they can
sell their goods with only 3% VAT added, which is the Luxembourg rate. This was
felt to be tax dodging, so the new rules stipulate that instead of applying the
VAT rate associated with the seller’s country, they are now to be applied
according to the rates of the buyer’s country.
The outcome is that if you buy an ebook, computer software,
apps, music, films etc in the UK, which have to be downloaded, then you will be
paying the 20% VAT rate instead of the previous 3% VAT rate, and that applies
to the crochet and knitting patterns as well. However, think yourself lucky you
don’t live in Hungary, because the VAT rate there is a massive 27%.
There is a catch though, and it’s due to all the EU countries
having different VAT rates. If you go on holiday and download something using a
local wifi connection, then you will pay that country’s VAT rate. Moral – don’t
download anything in Hungary.
It’s ironic, really, legislation implemented by the EU to
prevent tax dodging by the big conglomerates won’t add anything to their costs,
because it’s the buyer who pays the VAT. And that is you!
So, if you download something and say to yourself, I’m sure
that was cheaper in December, don’t blame the seller, blame the EU.
Check out the EU VAT Action Campaign
Group
Chris Longmuir
Amazon
Apple iBooks
