28 ms·

France may tax publications protected by DRM at a higher rate

62 points by koudi 13y ago

infocollector 13y ago
What happens when one buys an electronic book from outside France ( http://bookscanner.us http://bookscanner.us ) ? Who pays the tax and when?
- paulgb 13y ago
  This is off-topic, but it pains me to see that they shred and recycle the books rather than donating them to schools/libraries.
  - icebraining 13y ago
    That would be a copyright violation. The only way to avoid the charge is to destroy the original, so that they can claim no real copy has been made, just a transfer of format.
    - paulgb 13y ago
      Ah, that makes sense.
  - infocollector 13y ago
    They do shred+recycle, but they can not donate. Its all about copyright laws! :(
- desas 13y ago
  The same as buying anything else from a different country. If it is bought from another EU country thencvat is collected by the company. From memory if it is bought from outside the EU/EEA then the customer is supposed to pay the tax when it is imported
  - Someone 13y ago
    But if you travel with the wares, you can bring in €X (around €400) worth of stuff tax-free per trip (there are independent limits for alcohol, tobacco (as long as it is for your own use), and medicines) See for example http://www.hmrc.gov.uk/customs/arriving/arrivingnoneu.htm http://www.hmrc.gov.uk/customs/arriving/arrivingnoneu.htm (that's for the UK, but AFAIK these rules are standardized across the EU. At least, http://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/belastingdienst/individuals/abroad_and_customs/luggage/from_a_non_eu_country/for_which_goods_am_i_not_liable_for_the_payment_of_tax http://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/b... is very similar)
- ernesth 13y ago
  This law is supposed to take effect after the 2015/1/1 on which day VAT in Europe will be collected according to the country of the buyer while at the moment it is collected according to the country of the seller.
FennNaten 13y ago
Yeah, thought that was a great idea and was happy that the law was voted... and two days after, Assembly voted an article cancelling this one, pushed by the government. A big lobbyism at work and a "Europe won't like it and will condemn us" excuse. Our government has no balls.
- Oletros 13y ago
  It is not an excuse, a member can't change the type of VAT applied to products
  - FennNaten 13y ago
    I know that but that's not really my point. We already changed the type of VAT on this. Bit of context for better understanding (sorry for the length): Point of the law article was to say digital products with DRMs and platform locking aren't really products selling, but renting services instead, and so must be taxed as such. On the other hand, ebooks without DRMs and platform locks are technically books, even if not printed, and so must fall into the book tax class, which has a lower rate. But at the moment, at European Commission level, ebooks are all, DRM or not, considered as services and not eligible to lower tax rates. However, in 2012, France and Luxembourg kind of said "fuck off" to Europe on this point, and both put the VAT rate on ebooks (with and without DRMs) in the book category. For that those countries are under procedure from European Court and must justify enough the case if they don't want to be fined. The debate is on, and may cause a change on this at European level. Our government estimated that the law article making the distinction between DRMised and not DRMised products didn't come at the right time regarding the ongoing debate. And that's what baffles me: the "show up my balls" move had already be done, and this law article was in my opinion a good way to show that we're thinking about what we do, and are not directed by Amazon-leaded lobby on the tax rate choice, because it excluded them of it. And that could have been a good argument over the European Court: we make our choices because of their logical nature, not because of external pressure. The retractation however, shows the opposite.
Cynddl 13y ago
It's a little more difficult. The proposed legislation is not accepted, and will probably not be: http://translate.google.com/translate?sl=fr&tl=en&u=http%3A%2F%2Fwww.april.org%2Fprix-du-livre-vers-une-tva-selon-la-presence-ou-non-de-drm&act=url http://translate.google.com/translate?sl=fr&tl=en&u=http%3A%...
asb 13y ago
Right now in the UK, VAT is at 20% on ebooks as it is for any other standard rate item. Physical books and magazines are at 0%. Most people won't be paying this though, as sites like Amazon sell from Luxembourg where VAT on eBooks is 3% (http://www.amazon.co.uk/gp/help/customer/display.html?nodeId=502578 http://www.amazon.co.uk/gp/help/customer/display.html?nodeId...). This can mean that providing a digital product (this recently came up with the Linux Voice IndieGoGo http://www.indiegogo.com/projects/linux-voice/ http://www.indiegogo.com/projects/linux-voice/) doesn't knock off as much of the cost as you might expect.
- gamblor956 13y ago
  The Luxembourg loophole is expected to be closed by 2015, at which point Luxembourg must increase its VAT in line with those of other EU nations (or alternatively, must alter its VAT system so that the 3% rate is only available for sales to Luxembourg customers). If Luxembourg doesn't change its VAT system, the European Commission will likely carry through on last year's threat to impose fines which would wipe out the tax income Luxembourg currently generates from offering the loophole to companies like Amazon. http://www.the-digital-reader.com/2013/09/18/new-tax-rules-eu-will-wipe-amazons-tax-loophole/#.UokJ4-KCFEY http://www.the-digital-reader.com/2013/09/18/new-tax-rules-e...
joelhaasnoot 13y ago
This is the same in the Netherlands - VAT on ebooks is 21% ("luxury goods"), normal books are at the 6% rate (same as household goods, foods, etc). Then again, there are more strange classifications in any tax schedule - hamster food is taxed at 21%, rabbit food at 6% (rationale supposedly being rabbits are food too...) and fixing a moped is 21%, but a bike is 6%.
- tokenizer 13y ago
  The only problem I have with an analyzed/conditional tax system is the legitimacy of the party in charge of collecting it. Everyone can nod their heads at taxing vehicles more than bicycles, but if that additional government income goes into tax breaks for certain corporations, or bad social policies (everyone thinks there's one!). This is why I enjoy flat taxes, so we can focus more on the policies that money provides, rather than siderail that discussion with debates on what those taxes should be. Obviously we should implement policies that become less expensive with time, but hearing that the Netherlands has a 21% tax rate on moped repair is insane. What does that money directly contribute to? The military? Tax breaks? With flat sales taxes we can focus directly on policy. Everyone is equal in terms of the percentage of product consumers must pay in taxes, for their product.
  - mercurial 13y ago
    I'm sure the government will just happily give tax breaks (this need not be VAT...) or contracts to Big Business in a land of flat taxes, really. I think, on average, that I'm pro non-flat taxes. I'd love to see books NOT be taxed 25% here.
  - joelhaasnoot 13y ago
    Ah yes - flat sales tax - County XYZ needs a new courthouse so decides to raise sales tax 0.5% within city limits. Not only more complicated, but doesn't seem very fair either. Our taxes are easier than the US system because it's a national tax. My main problem with this tax strategy is that we're "protecting" an industry (book publishers, sellers, etc) that's in decline and probably will stay that way. Taxing ebooks more isn't going to change that - the economics of bits vs printed pages are ofcourse also inverse as these tax rules.
Oletros 13y ago
Having DRM is not the cause of higher VAT, is being an electronic document what makes the VAT being the standard and not the reduced one. And it is and European categorization, all the countries members of the EU must use that VAT
- ernesth 13y ago
  France is battling Europe's notion of what electronic books are. At the moment, contrary to Europe's advice, France taxes ebooks as books (5.5% in France) while Europes wants ebooks to be taxed as services (20% in France). This law plays on that distinction, considering that DRMed books are licences hence should be subject to 20% VAT while non DRMed books are indeed books hence subject to low tax.
- deleted 13y ago
  [deleted]
fnordsensei 13y ago
And those taxes will get passed on to the customer, guaranteed.
- desas 13y ago
  Yes, the tax is the VAT, which is designed to be only paid by customers. It's roughly analogous to a sales tax in the US
mtgx 13y ago
Add to that the fact that Amazon is subsidizing Kindle device buyers, by asking all the other foreigners to pay an extra $2 for each e-book, making e-books much more expensive for the vast majority of Kindle ebook buyers: http://davidgaughran.wordpress.com/2011/07/11/amazon-hold-back-the-growth-of-e-books-around-the-world/ http://davidgaughran.wordpress.com/2011/07/11/amazon-hold-ba...

62 points by koudi 13y ago

What happens when one buys an electronic book from outside France ( http://bookscanner.us http://bookscanner.us ) ? Who pays the tax and when?

paulgb 13y ago
This is off-topic, but it pains me to see that they shred and recycle the books rather than donating them to schools/libraries.
- icebraining 13y ago
  That would be a copyright violation. The only way to avoid the charge is to destroy the original, so that they can claim no real copy has been made, just a transfer of format.
  - paulgb 13y ago
    Ah, that makes sense.
- infocollector 13y ago
  They do shred+recycle, but they can not donate. Its all about copyright laws! :(
desas 13y ago
The same as buying anything else from a different country. If it is bought from another EU country thencvat is collected by the company. From memory if it is bought from outside the EU/EEA then the customer is supposed to pay the tax when it is imported
- Someone 13y ago
  But if you travel with the wares, you can bring in €X (around €400) worth of stuff tax-free per trip (there are independent limits for alcohol, tobacco (as long as it is for your own use), and medicines) See for example http://www.hmrc.gov.uk/customs/arriving/arrivingnoneu.htm http://www.hmrc.gov.uk/customs/arriving/arrivingnoneu.htm (that's for the UK, but AFAIK these rules are standardized across the EU. At least, http://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/belastingdienst/individuals/abroad_and_customs/luggage/from_a_non_eu_country/for_which_goods_am_i_not_liable_for_the_payment_of_tax http://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/b... is very similar)
ernesth 13y ago
This law is supposed to take effect after the 2015/1/1 on which day VAT in Europe will be collected according to the country of the buyer while at the moment it is collected according to the country of the seller.

FennNaten 13y ago

Yeah, thought that was a great idea and was happy that the law was voted... and two days after, Assembly voted an article cancelling this one, pushed by the government. A big lobbyism at work and a "Europe won't like it and will condemn us" excuse. Our government has no balls.

Oletros 13y ago
It is not an excuse, a member can't change the type of VAT applied to products
- FennNaten 13y ago
  I know that but that's not really my point. We already changed the type of VAT on this. Bit of context for better understanding (sorry for the length): Point of the law article was to say digital products with DRMs and platform locking aren't really products selling, but renting services instead, and so must be taxed as such. On the other hand, ebooks without DRMs and platform locks are technically books, even if not printed, and so must fall into the book tax class, which has a lower rate. But at the moment, at European Commission level, ebooks are all, DRM or not, considered as services and not eligible to lower tax rates. However, in 2012, France and Luxembourg kind of said "fuck off" to Europe on this point, and both put the VAT rate on ebooks (with and without DRMs) in the book category. For that those countries are under procedure from European Court and must justify enough the case if they don't want to be fined. The debate is on, and may cause a change on this at European level. Our government estimated that the law article making the distinction between DRMised and not DRMised products didn't come at the right time regarding the ongoing debate. And that's what baffles me: the "show up my balls" move had already be done, and this law article was in my opinion a good way to show that we're thinking about what we do, and are not directed by Amazon-leaded lobby on the tax rate choice, because it excluded them of it. And that could have been a good argument over the European Court: we make our choices because of their logical nature, not because of external pressure. The retractation however, shows the opposite.

Cynddl 13y ago

It's a little more difficult. The proposed legislation is not accepted, and will probably not be: http://translate.google.com/translate?sl=fr&tl=en&u=http%3A%2F%2Fwww.april.org%2Fprix-du-livre-vers-une-tva-selon-la-presence-ou-non-de-drm&act=url http://translate.google.com/translate?sl=fr&tl=en&u=http%3A%...

asb 13y ago

Right now in the UK, VAT is at 20% on ebooks as it is for any other standard rate item. Physical books and magazines are at 0%. Most people won't be paying this though, as sites like Amazon sell from Luxembourg where VAT on eBooks is 3% (http://www.amazon.co.uk/gp/help/customer/display.html?nodeId=502578 http://www.amazon.co.uk/gp/help/customer/display.html?nodeId...). This can mean that providing a digital product (this recently came up with the Linux Voice IndieGoGo http://www.indiegogo.com/projects/linux-voice/ http://www.indiegogo.com/projects/linux-voice/) doesn't knock off as much of the cost as you might expect.

gamblor956 13y ago
The Luxembourg loophole is expected to be closed by 2015, at which point Luxembourg must increase its VAT in line with those of other EU nations (or alternatively, must alter its VAT system so that the 3% rate is only available for sales to Luxembourg customers). If Luxembourg doesn't change its VAT system, the European Commission will likely carry through on last year's threat to impose fines which would wipe out the tax income Luxembourg currently generates from offering the loophole to companies like Amazon. http://www.the-digital-reader.com/2013/09/18/new-tax-rules-eu-will-wipe-amazons-tax-loophole/#.UokJ4-KCFEY http://www.the-digital-reader.com/2013/09/18/new-tax-rules-e...

joelhaasnoot 13y ago

This is the same in the Netherlands - VAT on ebooks is 21% ("luxury goods"), normal books are at the 6% rate (same as household goods, foods, etc). Then again, there are more strange classifications in any tax schedule - hamster food is taxed at 21%, rabbit food at 6% (rationale supposedly being rabbits are food too...) and fixing a moped is 21%, but a bike is 6%.

tokenizer 13y ago
The only problem I have with an analyzed/conditional tax system is the legitimacy of the party in charge of collecting it. Everyone can nod their heads at taxing vehicles more than bicycles, but if that additional government income goes into tax breaks for certain corporations, or bad social policies (everyone thinks there's one!). This is why I enjoy flat taxes, so we can focus more on the policies that money provides, rather than siderail that discussion with debates on what those taxes should be. Obviously we should implement policies that become less expensive with time, but hearing that the Netherlands has a 21% tax rate on moped repair is insane. What does that money directly contribute to? The military? Tax breaks? With flat sales taxes we can focus directly on policy. Everyone is equal in terms of the percentage of product consumers must pay in taxes, for their product.
- mercurial 13y ago
  I'm sure the government will just happily give tax breaks (this need not be VAT...) or contracts to Big Business in a land of flat taxes, really. I think, on average, that I'm pro non-flat taxes. I'd love to see books NOT be taxed 25% here.
- joelhaasnoot 13y ago
  Ah yes - flat sales tax - County XYZ needs a new courthouse so decides to raise sales tax 0.5% within city limits. Not only more complicated, but doesn't seem very fair either. Our taxes are easier than the US system because it's a national tax. My main problem with this tax strategy is that we're "protecting" an industry (book publishers, sellers, etc) that's in decline and probably will stay that way. Taxing ebooks more isn't going to change that - the economics of bits vs printed pages are ofcourse also inverse as these tax rules.

Oletros 13y ago

Having DRM is not the cause of higher VAT, is being an electronic document what makes the VAT being the standard and not the reduced one. And it is and European categorization, all the countries members of the EU must use that VAT

ernesth 13y ago
France is battling Europe's notion of what electronic books are. At the moment, contrary to Europe's advice, France taxes ebooks as books (5.5% in France) while Europes wants ebooks to be taxed as services (20% in France). This law plays on that distinction, considering that DRMed books are licences hence should be subject to 20% VAT while non DRMed books are indeed books hence subject to low tax.
deleted 13y ago
[deleted]

fnordsensei 13y ago

And those taxes will get passed on to the customer, guaranteed.

desas 13y ago
Yes, the tax is the VAT, which is designed to be only paid by customers. It's roughly analogous to a sales tax in the US

mtgx 13y ago

Add to that the fact that Amazon is subsidizing Kindle device buyers, by asking all the other foreigners to pay an extra $2 for each e-book, making e-books much more expensive for the vast majority of Kindle ebook buyers: http://davidgaughran.wordpress.com/2011/07/11/amazon-hold-back-the-growth-of-e-books-around-the-world/ http://davidgaughran.wordpress.com/2011/07/11/amazon-hold-ba...