Writing on self-publishing Anna Baddeley says up until 1 January this year self-published and small, independent publishers had a couple of choices for where to sell their books – the most obvious one was through big platforms such as Amazon and Kobo, and also on their own websites.
But since then, the European Commission has changed the law so that retailers of digital goods (or e-books in this case) have to pay 20 percent VAT on e-book sales in the country where the book is bought, not where it is sold.
(Previously Amazon had taken advantage of Luxembourg’s 3 percent VAT rate.)
The author points out that this has an unfair effect on micro and small businesses trying to sell books on their own sites, as they are forced to calculate different tax rates. In addition, businesses with an annual turnover of less than £81,000 are now no longer exempt from VAT. If they sell even one e-book or audio book to a customer outside of the UK, they need to apply VAT to all UK sales too.
The only feasible option, Ms Baddeley says, is for customers to sell through Amazon or other large retailers, and that the law designed to reduce the dominance of big corporations is likely to result in making them even stronger.