Others have gone into this in some detail (See Kal Spriggs post on How I Learned to Hate the VAT, for example), but I think that it behooves us self-published authors to advise our readers and fanbases of what’s coming down the pipe.
Bluntly, Amazon is getting their fingers slapped for tax evasion in the EU, and they’re passing the stinging sensation on to reader’s wallets. Up to this point, they’ve been able to apply the VAT of the country of the seller in the European Union – in Amazon’s case, this is Luxembourg at 3%.
As of January 1, 2015, however, a purchaser on Amazon must pay the VAT of their own country – as high as 23% in Ireland and several other countries.
To make up for this, on January 1, Amazon will apply a one-time modification to all prices on the various EU Amazon sites to bring them up to VAT inclusive amounts – and to bring them to new minimum prices including VAT.
Notably, the minimum price (which applies to Starship’s Mage) is going up in both regions, to £0.99 in the UK and €0.99 in the rest of the EU. While I have some flexibility in the cost of Children of Prophecy and Starship’s Mage: Omnibus, the Episodes themselves will go up to those minimums at January 1st.
Prices for the Omnibus and Children of Prophecy will also increase slightly, though probably not enough to remove the impact of the VAT change on my royalties – my current thought is to drop the price somewhere in the middle so that neither I or my readers is feeling the full pain.
This kind of change is the inevitable consequence of the “stop tax evasion” policies and programs we hear a lot about, and I’m generally in favor of companies paying their fair share. There will be some adjusting, but I think we’ll reach a new equilibrium.
That said, if you’re in the EU and feel like buying Christmas presents, my e-books can be considered on sale till January 1 now XD
-Glynn Stewart
Or for people that live in Sweden or other countries without official Amazon sites, that have to buy through the US Amazon site (yes that’s the official way) we already pay 25% VAT (in Sweden)… $0,99 books are $1,24. Thank god they took away the extra $1 they added before VAT before. Paying $2,49 for a $0,99 book felt wrong. I’m guessing the author didn’t get that extra $1 😉
Given that I’ve never heard of the extra $1 charge, and that most non-US purchases through Amazon.com actually go through at a lower royalty rate, I would guess that no, no we don’t!
I remembered wrong, I think it actually was $2 they added as extra cost not $1. A quick question, do you remember if you had Episode 1 at $0,99 or $1,99 at the beginning? Because I paid $3,74 for that one and $1,24 for the rest, that would mean $0,99 plus $2 extra and then + 25% VAT. Anyway that went away at the beginning of 2014, at least for me!
$3.74?! O_O
The Starship’s Mage Episodes have always been $0.99 or a reasonable approximation in local currency. That is a massive surcharge – I’m glad they got rid of it or I don’t think I’d have many Swedish readers!