For readers in the EU and, particularly, the UK: The price of e-books will be going up in 2015. The culprit? VAT taxes. Starting in January, 2015, there is a huge change in the way VAT will be calculated in European countries.
Following a European Commission ruling dating back to 2008, e-books are to be taxed in the European member state in which the consumer is located, at the tax rate of that country, as opposed to the country from which the product is sold. The move prevents Amazon, Nook and Kobo from applying the low 3% tax on e-books sold to European countries, just because their headquarters are in Luxembourg. Instead, the e-book retailers will have to apply the standard UK VAT rate (20% at the time of writing) to e-books sold into the UK.
The big problem behind this for publishers, writers and consumers alike is the fact that print books have a 0% VAT rate. E-books, however, are taxed. While the tax will undoubtedly be helpful for the governments like that of the UK which will benefit from the added tax income, the new costs will affect consumers in the form of higher prices.
Before the prices go up,may I suggest e-books for Christmas? 🙂