App Store and iTunes Prices in UK May Increase Up to 20%

Discussion in ' News Discussion' started by MacRumors, Mar 23, 2014.

  1. macrumors bot


    Apr 12, 2001

    Apple's iTunes and App Store downloads may see a price increase next year when new UK laws take effect.

    The Guardian reports that the most recently introduced budget closes a loophole that allowed digital downloads to avoid UK taxes.
    Digital download retailers such as Apple and Amazon presently avoid the UK's 20% VAT by selling from countries such as Luxembourg where the tax rate is only 3%-15%. Under the new law, downloads to UK customers will be taxed at the higher 20% rate. Apps may be least affected as they are presently taxed at the higher range of 15%.

    The change appears to affect all digital downloads including music, apps, and e-books, and will take effect on January 1, 2015.

    Article Link: App Store and iTunes Prices in UK May Increase Up to 20%
  2. macrumors 6502

    Oct 1, 2005
  3. macrumors newbie

    Atomic Wasp

    Oct 14, 2013
    Better get Final Cut Pro X sooner rather than later then!
  4. JAT
    macrumors 603

    Dec 31, 2001
    Mpls, MN
    Loophole? Isn't it just a new law with different %s and rules? Why do people assign grandiose terms to what laws say?
  5. Ori
    macrumors 6502

    Jun 18, 2008
    Not sure if this new tax law complies with eu legislation.
  6. macrumors demi-god


    Feb 9, 2011
    southerner trapped 'up north' (UK)
    I think i am split over-this decision:
    on one side, i feel that tax avoidance by companies like apple, amazon and starbucks is diabolical, given that the customer originated from the uk - a deontological virtue, to pay taxes in a righteous manner

    on the other side, this means all my apps will cost me more:eek:
  7. macrumors regular

    Feb 27, 2012
    Vienna, Austria
    Apple should simply ****ing absorb the VAT. It's not as if they did not already profit enough from those tax leaks and make quite some money anyway.

    You wanna make money in a certain country? Pay this country's taxes.
    Just ridiculous to pay taxes in Luxembourg or Ireland but sell goods and services in a completely different country?
  8. macrumors 68000


    Apr 11, 2013
    Washington D.C.
    Lmao, that blows. You hear them complaining about the cost of Macs already, and now this on top. It's getting reallyyyy expensive to be a nerd nowadays :D
  9. macrumors 65816

    Apr 23, 2010
    Don't feel bad, UK. Many here in the US know your pain. I live in New York State, which a while back instituted the "Amazon tax", making us one of the few states that actually taxes Amazon purchases. New York - the state that never met a tax it didn't love.
  10. macrumors 6502

    Jan 13, 2008
    But you draw the line with the customer paying taxes for their given country? :rolleyes:
  11. macrumors member

    Mar 27, 2011
    You will alway pay any tax as a consumer. It's always you who will pay corporate taxes. I'm sure you will never understand.

    Now you get what you wanted in first place. Pay your tax peon.
  12. macrumors 6502a


    Dec 31, 2012
    Buffalo, NY
    Don't matter to me, I live in the U.S. Sorry UK
  13. macrumors 68030


    Mar 16, 2012
    Manchester, UK
    And I am holding my breath maybe a day would come and Apple give to us for free, lol :D
  14. macrumors 6502


    Mar 2, 2010
    Ok, let's play this game. App is £10. Currently, developer gets £7 and Apple £3. Under 1-Jan-2015 laws, and your proposal, Apple should, from their £3 profit, pay the £2 tax. Ok, the still make £1. What, then, stops the government from stating the VAT is 40% starting 1-Jan-2016. Should Apple then absorb that loss, too? So charge the customer £10, pay the developer £7, pay the government £4 and write off that £1 loss. Yeah, great idea.

    This is going to come to the states soon enough. It is part of the problem that needs to be addressed because the laws have not kept up with the times.
  15. macrumors 6502a


    Mar 23, 2011
    Leeds, UK
    Quite right too! If you're going to have VAT (I'm unsure about the morality of VAT - seems a bit regressive to me, why don't we get rid of VAT most other taxes and just have higher income taxes?) it shouldn't matter where the product is being sold from.
  16. macrumors 603


    Feb 3, 2010
    United Kingdom
    I've always been in the camp which believes it's the job of the government and the state to close these loopholes which allow legal tax avoidance, rather than relying on people's morals. After all, if it's legal, what's wrong with it? So this is a step in the right direction for the government.

    That doesn't mean I'm not a bit pissed off that everything I download will cost more, though :p
  17. markrich, Mar 23, 2014
    Last edited: Mar 23, 2014

    macrumors newbie

    Feb 8, 2005
    double tax?

    I'm not sure how that is compliant with EU law.

    Value Added Tax or Retail Tax is always paid in the state of purchase for goods. If I buy a suit from Italy I pay Italian tax on my purchase. If I buy a CD from Estonia I pay Estonian tax and if I buy some music from Luxembourg I am paying Luxembourg tax.

    If I am therefore paying tax in the country of purchase as the law states.

    if VAT wasn't so high in the UK due to the policy of low direct tax and high indirect tax, companies wouldn't want to sell goods in the state with the lowest consumer tax which only benefits us as consumers.

    If Osborne and Cameron think they can get a change in the law here they may have a tough fight as the EU Parliament elections are this year and the other state leaders may not be willing to see money flow out of their country towards the place of the end user instead of the purchase.

    Perhaps the Cameron regime would be better to look again at the Commision proposal to eventually harmonise VAT levels across the Union. That way there would be less incentive to set up a business in another state.
  18. macrumors 6502


    Mar 2, 2010
    I prefer it that way. I live in SC currently. I get an email every January telling me how much I bought that I need to claim on my taxes. I do, but know I am in the small minority who does so. We all, regardless amazon collecting the tax or not, are required to pay this tax. If amazon were to collect in every state, it would be best. Also, allows for a more fair environment for local businesses.
  19. macrumors 603


    Oct 21, 2008
    Time, because it rules EVERYTHING!
    I suspect we would riot in the streets if they increased tax to 40% and I am NOT joking on that. We would literally have a civil uprising. So that is what is stopping them.
    And I agree, Apple should absorb the increase, they have made enough billions by dodging the UK taxes they had a duty to pay by exploiting loopholes. They are not the only ones either.
  20. macrumors 6502


    Mar 2, 2010

    Why would you riot? You aren't paying it in your example, Apple is.
  21. macrumors 6502

    Jan 13, 2008
    They had a duty to pay more than was legally required?
  22. macrumors 603


    Feb 3, 2010
    United Kingdom
    Because almost everything would suddenly cost more, unless literally every company hypothetically absorbed the VAT increase as well. It wouldn't just affect Apple!
  23. macrumors 601


    Oct 3, 2006
    I have to pay taxes on the things I purchase from the iTunes and App Store so why shouldn't people in the UK have to pay taxes. No sympathy from me.
  24. macrumors demi-god


    Feb 26, 2011
    New England, USA
    Since I assume that you have lived in the UK (currently, or at some time) for some considerable period of time (otherwise the post would be...ah...ill considered), could you expand on the comment and explain why the UK is a joke.
  25. pgiguere1, Mar 23, 2014
    Last edited: Mar 23, 2014

    macrumors 68020


    May 28, 2009
    Montreal, Canada
    If corporations had to absorb all sales taxes, socialist countries with high sales taxes would be advantaged compared to the more capitalist ones.

    If this was the case, why would any country not turn super-socialist and make every public service free and put 50% sales taxes on everything? It's corporations, not citizens, that would end up paying for that 50% anyway. Where do we set the bar? Apple and the likes would end up paying for your healthcare and infrastructures while it wouldn't in non-socialist countries. How is that fair?

    In the end, you'd want corporations to be paying for basically all of your government's expenses, except that in reality it wouldn't be sustainable for them to do so, so they'd just stop making business in your country.

    And I say that as a Canadian who pays an extra 15% sales tax on top of every product that's already more expensive than in the states. Your proposition just seems incredibly naive and selfish. I'm by no mean knowledgable about economics or politics but this kind of post (and its number of upvotes) is so cringeworthy it makes me feel better about the little understanding I have.

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