The Register has a short piece on the ebook formatting problems of JK Rowling’s new book The Casual Vacancy. It’s a shame the quality control wasn’t up to much for what would undoubtedly be a highly popular ebook.
But what really irks me in the article is this comment:
But as some have noted, the steep cost of the ebook shouldn’t be blamed on Rowling: It’s the taxman’s fault in Brussels.
Many publications, including printed books, maps and charts, magazines and newspapers, are zero-rated, but ebooks are classified differently because they are subjected to VAT.
Let’s pick this apart.
First, as one of the commenters on the article said, ebooks aren’t classified differently because they’re subject to VAT: they’re subject to VAT because they’re classified differently. Rightly or wrongly (wrongly, in my view) ebooks aren’t classified the same as printed books, which are exempt from VAT. This wrinkle can legitimately be blamed on the hypothetical Brussels taxman.
OK, so how much of the £11.99 Amazon currently charges for the book is VAT?
Amazon’s European tentacle is registered in Luxembourg, which means Amazon charges customers Luxembourg’s VAT rates. For ebooks, this is 3%. When I self-publish through Amazon I set the price excluding VAT: I poke at a calculator to work out how to make the number displayed by Amazon, which includes VAT, be the price I actually want people to pay.
Without the dastardly taxman in Brussels imposing VAT, The Register’s correspondent would have to pay the significantly cheaper price of… £11.64. Why, with that 35p saving he could buy almost… something.
And even setting aside the VAT issue, you couldn’t blame the ebook’s high price on Rowling. She’s not the publisher. I dare say the contract she has with her publisher is more to her favour than most traditionally published writers enjoy — I wonder if she receives a better royalty rate than the standard miserly amount? — but I don’t believe she’s allowed to set the price of her books.
Incidentally, Amazon is currently discounting the hardback version of The Casual Vacancy from £20.00 to £9.00. The ebook version currently costs £2.99 more than the hardback.
That’s what The Register should be complaining about.