UK Closes Tax Loophole On Digital Downloads, Prices Could Soar 20 Percent
March 24, 2014 9:24 AM
comment(s) - last by
Apple, amazon, and other digital item retailers will have to charge 20% VAT starting in 2015
A long-standing tax loophole has been available in the UK that allowed buyers of digital download products to pay fewer taxes on their purchases of digital books, music, and apps.
That loophole has now been closed and it will mean that Apple and Google now have to charge the standard 20% VAT. This likely means an end to music being offered at 99p.
Apple and other digital good sellers were allowed to
funnel digital purchases though countries like Luxembourg
where the tax rate was as low as 3%.
20% VAT on digital downloads could add £300 million in tax revenue
The new law will go into effect on January 1 2015, so fans of digital products in the UK have a bit less than a year before rates go up significantly. The new taxes are expected to raise an additional £300 million in tax revenue.
Both Apple and
Google have come under fire in recent years
for their tax avoidance practices in the UK. Google executive chairman Eric Schmidt defended his company in April 2013, stating, “I think the most important thing to say about our taxes is that we fully comply with the law and we'll obviously, should the law change, we'll comply with that as well."
This article is over a month old, voting and posting comments is disabled
3/24/2014 12:37:11 PM
Considering that we already pay far more that US Consumer for our music on iTunes etc I see no reason as to why the UK consumer should have to pay more.
The greedy corporations simply need to charge us the same as the US Citizens. That way we would pay less than we do now even with the VAT!
RE: Ripped off
3/24/2014 1:30:22 PM
Apple makes very little net revenue from iTunes and the app store. Should they take a loss on each sale?
Of course that cost will be passed on to you. All taxes paid by all companies are passed on to you.
RE: Ripped off
3/24/2014 6:29:39 PM
VAT is always passed along to the consumers. The corporations such as Apple is just a collector of the tax and pass it to UK government. They will not make any loss. The question is whether they can lower the price of sales (before tax) so that they are priced as the same?
“So far we have not seen a single Android device that does not infringe on our patents." -- Microsoft General Counsel Brad Smith
Google Avoids Paying $1.6 Billion USD In Taxes, UK PM Speaks Out
January 2, 2013, 11:32 AM
Apple Makes $9.5B USD in Britain, Pays Only 0.16% in Taxes; Google Also Targeted
April 10, 2012, 5:46 PM
Netflix Announces 7-to-1 Stock Split, Eyes Explosive Overseas Growth
June 23, 2015, 8:18 PM
Sources: Hack on Fed. Database Lost 4.1M Social Security Numbers, Personal Info
June 11, 2015, 9:11 PM
The Big One: Chinese Hackers Steal Records of 4 Million U.S. Gov. Employees
June 4, 2015, 8:13 PM
Tutorial: Here's How to Force YouTube or Vimeo VIdeos to Embed as HTML5
June 3, 2015, 10:14 PM
Google Finally Fixes Maps Bug That Was Giving Racist, Profane Results
May 21, 2015, 1:43 PM
The Pirate Bay Loses Its Iconic Swedish Dot SE Domains
May 20, 2015, 6:31 PM
Most Popular Articles
Windows XP, Vista Users Can Get Free Windows 10 Upgrade Thanks to Loophole
June 23, 2015, 2:23 PM
SanDisk's 200GB microSDXC Card Turns Smartphones Into Enviable PMPs
June 26, 2015, 2:02 PM
U.S. Navy Spends $9M USD to Cling to Windows XP, Office 2003
June 24, 2015, 2:03 PM
Under the Hood: Digging Into Sony's New CUH-1200 PS4, 1 TB Ultimate Player Ed.
June 23, 2015, 10:33 AM
Xbox Outsold 108-to-1 By PS4 in Japan, Weekly Sales Fall to 100 Units
June 22, 2015, 1:54 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2015 DailyTech LLC. -
Terms, Conditions & Privacy Information