For many days now, people have been talking, speculating and debating in Spain and throughout Europe about the different VAT tax levied on e-books and paper books. Such is the debate that some countries like Spain have already asked Brussels to find a way to equalize the taxes of both book formats.
The funny thing about this story is that several governments, institutions or associations have openly expressed their opinion but one of the heavyweights of the electronic books sector has not yet expressed their opinion. We are talking about Amazon that for the moment keep a strange silence that today we are going to try to explain why.
The silence of Amazon contrasts greatly with the continuous requests of the Spanish government, such as a few days ago the one made by the general director of Politics and Cultural Industries and the Book, Theresa Lizaranzu which highlighted "the need to achieve equalization in the VAT of printed and electronic books."
Why is Amazon silent?
The curious and powerful (monetarily speaking) reason that Amazon is silent is that the most famous virtual store in the world and one of the main players in the e-book market is that its invoicing in Europe is produced from Luxembourg, where the VAT of electronic books is 3%.
Amazon's "magic" accounting trick is undoubtedly very profitable since, for example, every Spaniard pays 21% VAT for each electronic book while Amazon declares only 3% taxes, which means that the profit is 18%.
With all this, Amazon not only makes a very interesting monetary benefit but also You can lower your prices, without losing profits, to be the benchmark in the market and not have any competition in, for example, the Spanish market since it is impossible for any publisher to offer prices as competitive as those of the virtual store.
What do you think of Amazon's accounting trick?
More information - Discover Hundred Zeros, an interesting tool to find free books on Amazon
Source - adslzone
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That «21% of I was going» ...
What a blunder ... I was going to blame the rush, the right one or anything else but it's not worth it.
Amazon cannot lower prices, as you say at the end of the report. It is the publishers that set the retail prices (VAT included, Spanish) for all channels. There is a fixed price law that prevents it. Because Amazon charges 3% VAT, your books will not be cheaper. Of course, you will earn more.