To quote a line in Raising Arizona, “The government do take a bite, don’t she?”
The Amazon tax war has been a hot-button issue in the US for years now, as states seek new revenue streams to chip away at their massive deficits.
Well, the same sort of scenario is playing out across the pond. Only this time, Amazon is using tax laws to stick it to ebook publishers, according to the Guardian.
Allegedly, Amazon Europe is trying to stick publishers with the UK’s 20% value added tax, even though Amazon only has to pay 3% — because its headquarters are located in a lovely little tax haven named Luxembourg.
In case you’re bad at math, that means Amazon may be trying to strong arm publishers out of 17% of ebook sales based on a tax that they don’t truly have to pay. Tisk tisk, I say…
To add another tricky layer to this mess, Amazon is a virtual monopoly when it comes to UK ebook sales. According to estimates, Amazon sells 9 out of 10 ebooks in the British Isles.
To be fair, I should point out that the Guardian claims to have a publishing contract that they cite as evidence.
In the US, Amazon is well known for being very fair with its publishers, generous even… maybe Amazon Europe is completely different?
Either way, 17% is a big freaking deal — whether or not these allegations are true. That’s nearly double the amount that US states are raising absolute cain about.
Publishing deals in the EU are quite different from those in the US and, unsurprisingly, there’s a lot of bureaucracy to navigate. If these allegations are accurate — Amazon seems to be playing that fact to its maximum advantage. Scandalous.
UK ePub experts: Please weigh in! Can you confirm that Amazon is possibly benefiting from a dodgy tax scheme?