Well that sucks... just FYI, I believe Steam (US) doesn't include state taxes in their games and software. I'm not sure if that includes UK, but I just wanted to point that out.
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App Store and iTunes Prices in UK May Increase Up to 20%
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I doubt the double Irish w/Dutch sandwich is the intents of the tax code, to put it mildly.
There is a difference between "more than legally required" and "exploiting loopholes" - Apple's strategy (and various other international corporations, Apple is by no means singled out here) is definitely covered by the latter. And fixing those loopholes is a big priority right now...
It's sales tax. You have that in Canada (in multiple flavors), or have you never bought anything in your life?
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Actually you got that wrong.
You can still go bankrupt even if you have health insurance. You don't expect the pesky insurance companies to pay for it all do you? They are experts at finding reasons to not pay.
I'm notnsurenehat UK laws are. In the USA, a company legally can not decide this. All taxes must be listed SEPPARATELY from retail value and charged as such.
I suppose a. Ino any that wanted to get around itncould drop retail price just enough that it would make the addition of tax come out to be the same net cost to the customer as it was before tax, but I suspect most consumers don't think that way. You can knock off 20% of retail to add 20% back in tax and most would still just be containing about that tax. ;(
Yeah, ok, sure. Right.
In the UK you always get shown the final price, taxes included. They might put a tiny "pre-tax" price on the label somewhere, but its very rare. That way no surprises when you reach the checkout. No matter how many times I go to the USA it always throws me slightly when I see something on the shelf for $20, reach the checkout and get told something like "$20.57 please."
There is zero difference between the two from a legal or accounting perspective. If you have some philosophy that argues your assumption, love to hear it.
Yeah, ok, sure. Right.
In the UK you always get shown the final price, taxes included. They might put a tiny "pre-tax" price on the label somewhere, but its very rare. That way no surprises when you reach the checkout. No matter how many times I go to the USA it always throws me slightly when I see something on the shelf for $20, reach the checkout and get told something like "$20.57 please."
It's like going in to Costco or Macro. I always get confused with the prices.
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I suspect it will make next to no difference to the end price we pay. Media on iTunes UK is already priced at the most the market will bear. For example, TV series tend to cost much more than buying them on DVD. The companies that set the price for this media will probably absorb the tax increase, or it will be too expensive for satisfactory sales figures; more and more would turn to illegal "free" sources.
Your 2 statements contradict.
VAT, GST etc... are consumer tax’s. Sellers just collect those taxes, they don’t pay them.
Totally different from Tax you pay on your profit.
If you calculate the 20% VAT, it only comes to $778. The other hundred and a bit doesn't go to pay towards things like healthcare, it's purely Apple's profit. The rest of the world gets hit a lot harder with Apple's pricing, even with VAT factored in.
I emailed Steve Jobs about it once. He replied.... Saying my 'math' was wrong
Exactly. It's ridiculous that it costs more to buy a TV series on iTunes than it does on DVD.
Damn. Better get myself a copy of Logic X and stop convincing myself 9 is enough for the next 10 years...
Its more difficult for people to avoid VAT than income tax. Also its a bit like a tax on imports since we don't make any thing any more
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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
Or...it's getting really expensive to leave in Europe, nowadays
Apple is not the only company affected and the UK is not the only country affected.
All countries in Europe charge VAT and the countries use an agreed set of rules to determine which country is entitled to the tax and which rate applies, based on the type of sale and the type of buyer (business or consumer).
Electronic services (including digital delivery of software/data/music/etc) have been taxed at the country of the seller, rather than the country of the buyer. Naturally, sellers who can choose their location will choose a location with a low rate which enables them to charge a lower price to consumers. Hence, Apple and others set up shop in Luxembourg to use their low tax rate.
An exception has been when the seller was outside of Europe. Initially, there was no applicable VAT. Then, around 2003 the EU required companies outside the EU (including companies from the US) to collect and pay VAT to the country of the buyer. That took away the VAT related cost advantage previously enjoyed by companies outside the EU.
Now the EU is changing the rules again so that VAT must be paid to the country of the buyer even for sales wholly within Europe (both buyer and seller).
Its a change for all EU countries, which will enable each country to levy VAT on purchases of its citizens, even if they are buying electronically delivered content.
It effectively levels the playing field for competing sellers. For a sale to a UK citizen the tax will go to the UK and it will be the same rate regardless of whether the seller is in the UK, Luxembourg or the US (or Spain, Japan, whatever). If the buyer in the UK is facing different prices from different sellers, it will be the result of real differences in the cost structures and efficiencies of the selling companies, not simply the result of accidents of location or deliberate tax management strategies (such as opening an office in Luxembourg).
All countries in Europe charge VAT and the countries use an agreed set of rules to determine which country is entitled to the tax and which rate applies, based on the type of sale and the type of buyer (business or consumer).
Electronic services (including digital delivery of software/data/music/etc) have been taxed at the country of the seller, rather than the country of the buyer. Naturally, sellers who can choose their location will choose a location with a low rate which enables them to charge a lower price to consumers. Hence, Apple and others set up shop in Luxembourg to use their low tax rate.
An exception has been when the seller was outside of Europe. Initially, there was no applicable VAT. Then, around 2003 the EU required companies outside the EU (including companies from the US) to collect and pay VAT to the country of the buyer. That took away the VAT related cost advantage previously enjoyed by companies outside the EU.
Now the EU is changing the rules again so that VAT must be paid to the country of the buyer even for sales wholly within Europe (both buyer and seller).
Its a change for all EU countries, which will enable each country to levy VAT on purchases of its citizens, even if they are buying electronically delivered content.
It effectively levels the playing field for competing sellers. For a sale to a UK citizen the tax will go to the UK and it will be the same rate regardless of whether the seller is in the UK, Luxembourg or the US (or Spain, Japan, whatever). If the buyer in the UK is facing different prices from different sellers, it will be the result of real differences in the cost structures and efficiencies of the selling companies, not simply the result of accidents of location or deliberate tax management strategies (such as opening an office in Luxembourg).
You don't like the increase, don't buy from Apple. If you don't like paying more in taxes, complain to your government.
All of them things aren't what's wrong with the UK, they're what's wrong with the entire world, maybe you'd be better off in Uganda. Hang on, no, you wouldn't.
In the UK, you see the final price (VAT inclusive). So when you download a 69p App, you pay 69p. It's Apple's responsibility to figure out what portion of that 69p is 'revenue' and what portion is 'sales tax'.
In this instance to keep the price at 69p, Apple could 'absorb' the increase in effective sales tax that they are paying, by dropping the underlying cost of the item.
If the previous breakdown was say 63p revenue and 6p tax, that could then become something like 58p revenue and 11p tax.
Why does closing a tax loophole make the UK a joke?
Neither do amazon or netflix etc - all of whom are based in Luxembourg for tax reasons.