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VAT rates

Switch Blayde 🚫

I found the 2017 VAT rates with Google. For those of you familiar with them, I have some questions.

1. For Germany, under 7% it says "excluding e-books." Does that mean an e-book is 19% ("All other taxable goods and services)?

2. For France, under 5.5% it says, "books (excluding those with pornographic or violent content); e-books." Does the porn part relate to e-books too? And how would they know? If it does I'll have to use 20% (not for the novel I'm about to publish, but others)

3. For Italy, under 4% it says, "for certain books." How do I know if my book is a "certain book"? If it's not, it's 22% (big difference).

4. For Spain, it says 4% for some books (excluding ebooks) so I assume Spain is 21%. Right?

5. Looks like U.K. is 20%. Is that right?

Are there any other countries with a VAT that I need to worry about? Australia? Canada? India? Japan? Others?

Replies:   Vincent Berg
Vincent Berg 🚫

@Switch Blayde

For Germany, under 7% it says "excluding e-books." Does that mean an e-book is 19% ("All other taxable goods and services)?

It means that ebooks are exempt from the VAT. The 7% VAT only applies to print books.

I have no idea what the French exceptions for porn refer to.

Switch Blayde 🚫
Updated:

I finally found the answer on an Amazon pricing page.

https://kdp.amazon.com/en_US/help/topic/ANRML55B0BWBK

U.K. = 20%
Germany = 19%
France = 5.5%
Italy = 4% or 22%* (22% if the ebook does not have an ISBN)
Spain = 21%
Netherlands = 21%

So I will determine my price in U.S. dollars. Then Amazon will convert it to the other currencies. For the U.K., I will then add 20%. For the EU countries listed above, I will add the appropriate VAT percentage for that country.

Then I'll have to determine if that's the price or if I should adjust it so that it ends in .99.

Switch Blayde 🚫

As it turned out, I was stressing over nothing. Amazon provided me with the VAT rates per country. I chose a U.S. price of $4.99 and it did the currency conversions based on that day's rate. Then I multiplied each by the appropriate VAT %. And then I made some minor adjustments that I don't know if I should have even done.

As it turns out, the bigger problem is the title. I think it was Crumbly who once brought that up. When I searched on the title "Last Kiss" on the U.S. Amazon site I had to scroll 5 pages to find mine. One novel "The Exception" appeared before mine because β€” get this β€” it was originally titled "The Kaiser's Last Kiss."

Oh, and as others here have done, I ended up publishing it under my real name β€” Elliot Scharfman. So, "Hi, I'm Elliot, glad to meet y'all."

Replies:   Vincent Berg
Vincent Berg 🚫

@Switch Blayde

As it turns out, the bigger problem is the title. I think it was Crumbly who once brought that up. When I searched on the title "Last Kiss" on the U.S. Amazon site I had to scroll 5 pages to find mine. One novel "The Exception" appeared before mine because β€” get this β€” it was originally titled "The Kaiser's Last Kiss."

Finding a unique name for a story is vital. The old style of naming a story for the lead female character is almost a death knell on Amazon, as no one will ever be able to find it.

I typically search Amazon for a variety of names and SEO keywords, calculating how many hits each receives. You want your title to have at least under 500 hits (though that's sometimes difficult.

Your SEO keywords will often alieviate your other problem, but may also be why "The Kaiser's Last Kiss" listed before your title. Search engines, like Amazon's and Googles, often base their search results on the SEO keywords, rather than just the title or author.

I'd suggest listing your pseudonym "Switch Blade" as an SEO keyword, along with any subtitles (if you enter subtitles as the title, as Amazon and other sites suggest, people typing the full title will never find your book!), so the story will pop up if someone enters either of those strings.

Still, after everything is said and done, when I want to find one of my stories, I'm forced to use "< story name > by Vincent Berg", otherwise I'll be searching through pages for days!

Switch Blayde 🚫

Ernest (or any Aussie),

Australia has a 10% GST tax which is like a VAT. Amazon didn't bring that up so I didn't up the price by 10%. Does that mean I will be paying the 10% tax?

Replies:   Ernest Bywater
Ernest Bywater 🚫
Updated:

@Switch Blayde

Australia has a 10% GST tax which is like a VAT. Amazon didn't bring that up so I didn't up the price by 10%. Does that mean I will be paying the 10% tax?

You're supposed to be paying the 10% GST - whether Amazon sites handling sales from outside Australia or not are charging it and paying is beyond my knowledge.

Here's your book on the Amazon Aust site - hows the price compare for you at A$6.59?

www.amazon.com.au/d/Last-Kiss-Elliot-Scharfman-ebook/B07364SNDB/ref=sr_1_1?ie=UTF8&qid=1498329478&sr=8-1&keywords=elliot+scharfman

On the US site it's US$4.99 using xe.com that converts to A$6.59 so it looks like the GST isn't being added into the price by Amazon, or they're absorbing it. However, it is required, by law, to be charged and collected by Amazon, and then paid to the government. The page includes a note saying "includes tax, if applicable."

I know the Lulu Aust site lists my books with the note "excludes GST" and when you go to buy they calculate the GST on the final sale price. That's because you pay on the final price not the retail, so discounts should be removed before they calculate the GST.

BTW: The Amazon site has a note on your book about a 70% discount on all Kindle books until 30 June 2017.

Switch Blayde 🚫

@Ernest Bywater

Here's your book on the Amazon Aust site - hows the price compare for you at A$6.59?

Amazon converted my US$4.99 to AU$6.61. I then lowered it to AU$6.59. So that's the price you see.

I did not add 10% to the AU$6.61. So what you're telling me is the AU$6.59 has the 10% GST in it, that is, if you were to buy it you would pay AU$6.59 total, not AU$6.59 + 10%.

Amazon will NOT eat it so unless I up the price by 10% I'm going to be paying it out of my pocket.

Replies:   Ernest Bywater
Ernest Bywater 🚫

@Switch Blayde

I did not add 10% to the AU$6.61. So what you're telling me is the AU$6.59 has the 10% GST in it, that is, if you were to buy it you would pay AU$6.59 total, not AU$6.59 + 10%.

when I used xe.com it converted US$4.99 to A$6.587 which rounds to A$6.59. However, the exchange rate may have varied between when you did the conversion and I did.

The Amazon Australia website said the taxes were included so the 10% GST (or 1/11th) should be removed before calculating the royalty for the tax to be paid.

Based on the US$4.99 converting to A$6.59 to include the tax you should add A$0.66 to make it A$7.25 for a tax inclusive price for the normal retail price. However, the GST is calculated on the actual sale price. So if you sell it to someone with a discount the tax is 10% of the discounted price. Thus an A$6.59 book at 50% discount would be sold for A$3.30 plus $0.33 GST for A$3.63.

Because of the way the GST is calculated Lulu advertise their prices as excluding GST (means the tax has to be added to the price shown) and then include it on the final bill. Which is different to how Amazon advertised tax included on the page (means the tax is in the price shown).

Replies:   Vincent Berg
Vincent Berg 🚫

@Ernest Bywater

Because of the way the GST is calculated Lulu advertise their prices as excluding GST (means the tax has to be added to the price shown) and then include it on the final bill. Which is different to how Amazon advertised tax included on the page (means the tax is in the price shown).

The key, between lulu and smashwords and amazon, is that the first two require you to log-in, so they know where you reside and who you are. Amazon refuses to require log-ins, and they insist on showing the retail prices without taking into account where you live, so the final price is always questionable.

Thus lulu and SW will sell everywhere for one price, and calculate the final tax just like they calculate the sales tax in the States. Yet Amazon treat the two completely differently.

Replies:   Ernest Bywater
Ernest Bywater 🚫

@Vincent Berg

The key, between lulu and smashwords and amazon, is that the first two require you to log-in, so they know where you reside and who you are. Amazon refuses to require log-ins, and they insist on showing the retail prices without taking into account where you live, so the final price is always questionable.

CW,

With Lulu you have the option of picking a country without having to log in, which is what I did to get my Aust prices. You click on the flag beside where it asks you to log in and you can select a country. Lulu then provides the site to you with all the prices, taxes, etc for sales in that country.

With Amazon you can pick a country to get the prices as per that country by placing a country code after the .com in the URL. To get the Aust prices for my post with the Aust sale prices for books I went to Amazon.com.au

With both sites I noted what they had to say about prices and taxes without having to log into the site. When Amazon says the price includes tax I have to believe them, and the same is true when Lulu says the advertised price excludes GST.

Replies:   Switch Blayde
Switch Blayde 🚫

@Ernest Bywater

Got a response from Amazon on Australia's GST.

The GST is added to the price of the book when it is sold in Australia.

Replies:   Ernest Bywater
Ernest Bywater 🚫

@Switch Blayde

Got a response from Amazon on Australia's GST.

Did they say if the advertised price of A$6.59 included the GST or not - the orange bar on the page says it does, so that would put the actual selling price 1/11th lower.

Switch Blayde 🚫

@Ernest Bywater

Did they say if the advertised price of A$6.59 included the GST or not - the orange bar on the page says it does, so that would put the actual selling price 1/11th lower.

Amazon said the GST was added onto the price when it's sold. But I don't think they're correct because:

On the U.S. site, there is no mention of tax because it's added to the price at checkout.

On the U.K. site, it says, "includes VAT." That means the VAT is built into the selling price (which I accounted for in my pricing).

On the Australia site, it says, "includes tax, if applicable." That's pretty much the same wording as the U.K. which has the VAT built into the price of the book.

The U.K. site says "includes VAT" and the Australia says "includes tax," but the U.S. site doesn't mention tax. Does the "includes" mean the sale price includes the tax? If it does, 10% (GST) will be deducted from my sale price before my royalties are calculated.

I sent them another email asking that question.

Switch Blayde 🚫

@Ernest Bywater

I found an article that says:

At the moment, imports of goods worth less than $1,000 are GST-free – including clothing, books, electronic devices and sports equipment.

So that means there is no GST on a book priced less than $1,000. Maybe that's why they say "includes tax, if applicable."

Replies:   Vincent Berg
Vincent Berg 🚫

@Switch Blayde

So that means there is no GST on a book priced less than $1,000. Maybe that's why they say "includes tax, if applicable."

I'd hate to see the ebook they charge more than $1,000 for!

Technically, I have. There was a comprehensive book on Atheism I really wanted to read, but it was priced at $15,000 apiece and was intended as a 'research' book for sale only to large research libraries. :(

Switch Blayde 🚫
Updated:

@Ernest Bywater

BTW: The Amazon site has a note on your book about a 70% discount on all Kindle books until 30 June 2017.

Ernest, the 70% off note is still on the page with my book, but my book wasn't discounted. I'm not sure why it's on my page. Maybe it's on every page.

Had my first sale (for this novel) from amazon.com.au. Amazon did not deduct the 10% GST before calculating the royalty (and the sale was on my July 2 which means the new law went into effect).

Replies:   Vincent Berg
Vincent Berg 🚫

@Switch Blayde

Ernest, the 70% off note is still on the page with my book, but my book wasn't discounted. I'm not sure why it's on my page. Maybe it's on every page.

Ernest and I have discussed this before, these 'Amazon promotions' are a way Amazon tries to generate additional interest in certain books, but Amazon eats the discount, so the author should never see a reduced payment for the books (which is why the author never sees the message about their book being discounted in the first place).

The topic was discussed endlessly when they first started it, and Amazon explained in detail how authors wouldn't be affected by it (though this is the first time I've noticed a site-wide discount on ALL Kindle books). That could potentially be a huge amount for them to loseβ€”though I find it suspicious they do it at almost the exact same time (June vs. July) as the long-planned Smashwords discount program (possibly trying to steal their thunder and further hurt their already limited sales?).

Replies:   Switch Blayde
Switch Blayde 🚫

@Vincent Berg

(though this is the first time I've noticed a site-wide discount on ALL Kindle books)

It's not ALL Kindle books. It says:

Kindle Daily Deal: Save at least 70%

Each day we unveil a new book deal at a specially discounted price - for that day only

So maybe my book was the new book having a deal that day which is maybe how/why someone in Australia found and bought my book.

Switch Blayde 🚫

OK, here's the latest.

On July 1, 2017, Australia will require the sellers (Amazon, ebay, Alibaba, espy, etc.) to collect the GST. A U.K. author I know was notified by Google Play that the 10% GST will be deducted from his selling price.

Since that's how Amazon handles the VAT today, my guess is any ebook sold in Australia starting July 1 will have 10% deducted from your selling price BEFORE royalties are calculated. So unless the author bumps the price of his book up by 10% he's going to be paying the tax.

I think I saw that India was also considering a GST.

Replies:   Vincent Berg
Vincent Berg 🚫

@Switch Blayde

I think I saw that India was also considering a GST.

For all those SOL authors selling thousands of rupies worth of ebooks on Amazon?

In all my years or publishing, I doubt I've sold more than a few books in India.

Switch Blayde 🚫

Response from Amazon received today:

For Australia, your royalty will be based on the selling price you've selected, and any additional taxes that get applied will be paid by the customer.

Switch Blayde 🚫

The latest response from Amazon:'

This change won't impact the royalty you earn per book or royalty options that you set in your KDP account. We'll continue to calculate your royalties based on the tax-exclusive list prices you provided for Amazon.com and Amazon.com.au.

The availability and pricing of titles in global Kindle Stores may vary by home country or region because of taxes and other operating costs.

Switch Blayde 🚫

This post has nothing to do with VATs or GSTs, but thought it would be interesting for those living in Australia. Here's some comments from Australians who responded to my post on wattpad:

I've definitely bought other goods from Amazon.com. It's often cheaper to buy there and pay shipping, than to buy local with postage. Also quicker. I can buy something from America on a Friday night, my time, and receive it Monday afternoon. If I buy something from Aus on a Friday night, it'd more likely be end of the next week before I got it.

and

the Amazon.au store is a very limited shopping experience compared to the .com store. Many of us Downunder refuse to switch our accounts over. There's no way I will shop .au when it only has 3 browse categories and a narrow selection of products. I won't switch my account until everything available in the .com store is made available on the .au store.

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