Got a tip for us?
Let us know
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
App Store Prices Increase in Europe and Canada Amidst Product Price Hikes in Brazil
- Thread starter MacRumors
- Start date
- Sort by reaction score
Sales tax in us = 0-9%
VAT in Italy = 22%
That still not covering $150+ of difference....
The Brazilians are getting what they voted for- these obscene protectionist duties set by their government are on all sorts of things, not just Apple products.
Sales tax in us = 0-10%
VAT in Italy = 22%
Here in Europe products cost the same in € as there in USD. Not a long time ago 1 € was worth 1.4 USD, go figure. And then there are the taxes.
A pair of levi's 501 costs 120 €, 141 to 168 USD depending on the change. The Ford Mustang's base price (with a smaller than available in the US 4 cylinder engine) is 42480 to 50 000 USD here.
The iPhone 6 16gb costs 680 to 807 USD without taxes, and taxes are about 20-22 % depending on the country.
It's also true that we have public health insurance and that deserves every single cent, that's for sure.
Last edited:
Levi's 501 are a good example of my point. They cost more than 100€ here while in USA I'm buying them every year for 36-42$.
That difference isn'tn caused by a 14-15% difference in vat.
There is absolutely no valid reason why I'm paying 150$ more for my iPhone than any American customer.
I ended up buying iPhones in USA several times in the past for that reason (iPhone 4S and 5S bought in Florida).
As a Canadian I am perfectly fine with this. I wouldn't even mind if Apple raised the exchange rate to 25% or maybe even 30%. A $0.99 USD app should cost $1.25 CAD here in Canada to keep things fair.
Quickly went through top app prices in Canada and found these so far:
0.99US -> 1.19 (+20c, 20%)
1.99US -> 2.29 (+30c, 15%)
2.99US -> 3.49 (+50c, 16.6%)
3.99US -> 4.59 (+60c, 15%)
4.99US -> 5.79 (+80c, 16%)
6.99US -> 7.99 (+1$, 14.3%)
7.99US -> 8.99 (+1$, 12.5%)
I'm sure there's one at $5.99US but haven't found one yet. Assuming it's 6.89
So it looks like the scale doesn't grow linearly for the deltas (i.e. the amount/percentage we pay for exchange rate):
+20c, +10c, +20c, +10c, +20c, +10c, +10c, +0c.
So, long winded way of saying the exchange rate isn't really fixed at 20%.
What $150 difference? $750*1.22 = $913 after 22% tax
-Or-
$994/1.22 = $814 base price.
Less than 10% between the adjusted prices. $750 vs $814 or $913 vs $994.
Last edited:
Hey, stop buying Apple products if you don't like their prices or unfair trade practices or using sweat shops in China were people jump out windows. It's called milking the capitalist cow for all its worth. Yeah baby! 
Perhaps I can interest you in some nice android alternatives? Here at GoOogle, we actually CARE about our customers. We never spy on them or give them reason to distrust us. You can COUNT on GoOogle. How about a nice Chrummybook instead of that overpriced apple juice?
Oh I've seen this claim over and over (notably most often from right-wing sources). It might make the world simpler IF it were true, but obviously it's not entirely true. Yes, businesses can TRY to pass on taxes to their customers through higher prices but you are completely and utterly FORGETTING something. It's called COMPETITION and DEMAND. While a company can try to pass on its taxes, if they raise the price above what consumers are willing to pay, they simply get less (or even possibly no) sales. If a competitor is willing to eat a tax (or other price increase due to whatever cost raise for a part, etc.) or lower their profit margin, they will likely get the sales and the business who raises their prices will not.
In other words, it's WAAAAAY too simplistic to suggest that a business can simply pass on 100% of costs to consumers at all times. It just doesn't work that way. If you exceed the cost of demand or competition undercuts you, you simply CANNOT raise your costs without killing your sales. Where this particularly comes into play is with companies making HUGE profits (e.g. Apple). A company like Apple can lower its prices or eat costs all day long because it's making so freaking much money. But it doesn't have to because demand is good. It makes sense, therefore to raise taxes on Apple up the wazoo because at some point raising their prices will simply harm the company and their sales and demand will fall off the chart, particularly so because Apple's products are luxury products and not necessary for life (like food) and yet even food manufacturers do their best to eat costs for certain items knowing the consumer blow back could destroy their business.
Like most things "right", half of it is half-truths made to make the other side look bad. Corporations are legal entities "people" according to the courts and people pay their taxes.
But even if you ignore what I said above, you still have a TAX SHIFT. In other words, only the people who buy Apple products pay for Apple's taxes. If you were to move taxes off the corporate structure and put them into an income or sales tax, you are moving the tax burden for luxury items onto different markets and income groups instead of the people buying the luxury goods who should be paying them since a sales or income tax are SHARED taxes (i.e. you pay towards Apple's share when you buy a loaf of bread whereas taxing Apple means only people who pay for Apple's good are paying for Apple's tax burden).
This is also why the "right" wants to move away from income tax and towards sales taxes. The rich pay a far lesser share of their overall income towards just surviving and so a far greater part of their overall income would be available to them if we just had a bigger flat sales tax whereas the lower income people who paid no income tax already now have to pay the sales tax (shifting burden onto people who can ill afford it as they are having trouble just surviving). The middle class may fall somewhere in-between, but clearly the rich would benefit the most by far by such a method.
The problem with simple absolutes used in propaganda on radio/news/etc. is that it only ever tells PART of the story.
Perhaps I can interest you in some nice android alternatives? Here at GoOogle, we actually CARE about our customers. We never spy on them or give them reason to distrust us. You can COUNT on GoOogle. How about a nice Chrummybook instead of that overpriced apple juice?
Oh I've seen this claim over and over (notably most often from right-wing sources). It might make the world simpler IF it were true, but obviously it's not entirely true. Yes, businesses can TRY to pass on taxes to their customers through higher prices but you are completely and utterly FORGETTING something. It's called COMPETITION and DEMAND. While a company can try to pass on its taxes, if they raise the price above what consumers are willing to pay, they simply get less (or even possibly no) sales. If a competitor is willing to eat a tax (or other price increase due to whatever cost raise for a part, etc.) or lower their profit margin, they will likely get the sales and the business who raises their prices will not.
In other words, it's WAAAAAY too simplistic to suggest that a business can simply pass on 100% of costs to consumers at all times. It just doesn't work that way. If you exceed the cost of demand or competition undercuts you, you simply CANNOT raise your costs without killing your sales. Where this particularly comes into play is with companies making HUGE profits (e.g. Apple). A company like Apple can lower its prices or eat costs all day long because it's making so freaking much money. But it doesn't have to because demand is good. It makes sense, therefore to raise taxes on Apple up the wazoo because at some point raising their prices will simply harm the company and their sales and demand will fall off the chart, particularly so because Apple's products are luxury products and not necessary for life (like food) and yet even food manufacturers do their best to eat costs for certain items knowing the consumer blow back could destroy their business.
Like most things "right", half of it is half-truths made to make the other side look bad. Corporations are legal entities "people" according to the courts and people pay their taxes.
But even if you ignore what I said above, you still have a TAX SHIFT. In other words, only the people who buy Apple products pay for Apple's taxes. If you were to move taxes off the corporate structure and put them into an income or sales tax, you are moving the tax burden for luxury items onto different markets and income groups instead of the people buying the luxury goods who should be paying them since a sales or income tax are SHARED taxes (i.e. you pay towards Apple's share when you buy a loaf of bread whereas taxing Apple means only people who pay for Apple's good are paying for Apple's tax burden).
This is also why the "right" wants to move away from income tax and towards sales taxes. The rich pay a far lesser share of their overall income towards just surviving and so a far greater part of their overall income would be available to them if we just had a bigger flat sales tax whereas the lower income people who paid no income tax already now have to pay the sales tax (shifting burden onto people who can ill afford it as they are having trouble just surviving). The middle class may fall somewhere in-between, but clearly the rich would benefit the most by far by such a method.
The problem with simple absolutes used in propaganda on radio/news/etc. is that it only ever tells PART of the story.
Demand drives price, not supply. This is about as simple as it can get. The price of an iPad 2 was about $325-425 (I found that number on BusinessInsider), and they sold them for $499, $599, and $699, and at the time, they weren't allowing discounts in 2010-2011. Apple sells a computer for 2-3x what a comparable PC would cost, and the demand is there, so they can sell them for what they wish. And they make gobs of money (which you allude to below) doing so.
Apple cannot "eat its costs all day long" and survive. Looking at the early Jobs-II era, and the horrible shape that Apple was in shows that them eating their costs without demand for their products is a bad recipe for success. Apple has to thank Microsoft for saving it when it was on the cusp of bankruptcy.
As for "raising taxes on Apple up the wazoo" is a bad policy as well. Apple should be taxed at the same rate as everyone else.
Besides, Apple just did what you said about raising their rates to the App store customers, as well as the developers in other markets.
MIT Economist Jonathan Gruber (hardly a person of the "right")illustrated the concept brilliantly when he said that the 40% Cadillac Tax on health insurance premiums would be paid by the customer of these insurance companies, and that the Federal Government will be the recipient of the revenue, while making the qualifications of the so-called "Cadillac Plans" non-indexed to inflation, so eventually, everyone that gets employer paid insurance into that category.
That's what I meant by, "their customers do." As for income taxes, I'm vehemently against them, for a number of reasons, but not limited to: It transfers ownership of one's income to the state's permission to keep what you earned. It is, in effect, the government saying, "all your income we have a right to, except what we let you keep by tax rates or a convoluted structure of special interests that get their deductions added to the tax code". The result is a 74,000 page code (in the US) that rewards accountants and keeps people in fear of the IRS. The other reason is that is point #2 of the Communist Manifesto, and the 16th Amendment is an abomination to the US Constitution. (http://en.wikipedia.org/wiki/The_Communist_Manifesto)
See http://fairtax.org/ While I don't agree with pre-taxing purchases, there is an accommodation for lower income people, with the prebate of ~$500/month, which represents the taxes that would be paid up to the poverty level, which makes it progressive in nature (a ramping progression to the sales tax level, so that level is never received, but approached, like an inverse function (1/x) never reaches zero, but approaches zero, as x approaches infinity.) As you accuse the right of doing, those that oppose replacing (repealing the 16th Amendment, and replacing it with a sales tax - I don't trust politicians, from now to forever, to have the ability to have both a sales and income tax at their disposal) the income tax are using fear, uncertainty, and doubt to use Alinsky's tactics to make people afraid to even question the IRS.
My opposition to pre-taxing purchases is that people tend to blame the wrong people for tax increases, as with gasoline. At $3.92/gallon, a resident of California pays 16.6% in taxes, but since taxes are per gallon, that percentage goes to 33.8% at $1.36/gallon. (Note: the sales tax does slide on this, but there is an state excise tax/gallon as well.) This is not from some infowar site, this is from http://energyalmanac.ca.gov/gasoline/margins/index.php the state of California web site.
While this is quite a treatise on our perspectives, with some tangents and accusations, I guess we can let it lay at "we agree to disagree".
My point is not the extreme that businesses don't pass taxes along, but rather that it is not some simple all or nothing proposition as it suggested by saying they pay nothing. To say businesses pay ZERO taxes ignores competition, market demand and more importantly, WHOM those taxes are being passed on to (i.e. it makes more sense for people using luxury services to pay the "passed on" taxes of Apple than someone buying groceries as part of some national sales tax or the like).
Like most things in life, the truth is not far left or far right, but somewhere in the middle (where ironically most people are and most people trying to control this planet are not).
Yeah, that's one of the things I said. If there's no demand, they can't just pass higher prices along to pay for a tax. Again, this is why it's simply not true that businesses don't pay "any" taxes. You can't pass everything along willy-nilly and totally ignore market demand (or the lack thereof) or competition. It's just not that simple except in campaign slogans that try to pin income or business taxes on the left when clearly the right's idea of using sales taxes or flat tax rates only benefits the rich due to relative income versus costs of living and how much is spent on it. The more you make, the more you should be taxed because otherwise you end up with all the money in the hands of a few and then the whole system collapses (see 3rd world countries and the Middle Ages for that matter).
You probably wouldn't have been able to reclaim the VAT on your app purchases before unless you are based in Luxembourg as its very hard, nigh on impossible, to get cross-border VAT refunds for such small amounts. However, it was possible to email Apple's VAT refunds department with proof of your VAT registration and get the VAT refunded on certain things (but not the iTunes store I believe).
This of course should change now that you will be charged VAT in your own country - you should be able to obtain a valid VAT invoice from Apple if you email them.