Steve Jobs Weighs in on iPad International Pricing and Taxes

[MacRumors]

With Apple's announcement on Friday regarding availability of the iPad in nine new countries later this month, a number of potential customers expressed dismay at the apparent higher prices in those countries relative to those in the United States. Several of those customers took the time to email Apple CEO Steve Jobs with complaints on the issue, two of whom shared his identical responses with us.

Please educate yourself. UK prices must by law include VAT, which is around 18%. US prices do not include tax.

Value added tax (VAT) is similar to the sales tax that is familiar to most residents of the United States, but is applied uniformly throughout the country for a given type of item and is included in the advertised pricing. Sales tax in the United States is not included in advertised pricing, as it varies significantly by region, even down to the municipality level.

The standard VAT rate in the UK is 17.5%, meaning that the £429 base price for the 16 GB Wi-Fi iPad in the UK is actually only £365 in "pre-tax" pricing. At current exchange rates, this corresponds to approximately $540 in the United States, or an approximately $40 premium for U.K. customers. While the price difference is not insignificant, it is considerably smaller than it might appear at first glance.

Apple has long offered somewhat higher international pricing on his products than it does in the United States, even accounting for difference in taxation practices. These differences are possibly due to increased overhead for distribution and "cost of business" in other countries, as well as the need to account for foreign exchange rates that can fluctuate over time.

Meanwhile, users in Germany have discovered that their iPad prices are higher than in other European countries, even when accounting for tax differences. At least one reader also emailed Jobs about this issue and reported to fscklog that he noted a special copyright tax imposed by the government there.

Blame your government. Germany just added a new copyright levy for computers.

The report notes that iPad prices in Germany are about 15 euros higher than those in France and Italy, with the extra copyright tax being applied due to the iPad's classification as a "PC without burner".

Article Link: Steve Jobs Weighs in on iPad International Pricing and Taxes

 

[ianham]

The noted prices for Canada are more expensive too, even though the dollar is pretty much at par. http://www.cbc.ca/technology/story/2010/05/07/tech-apple-ipad-canada.html

 

[appleguy123]

In Germany, what does the iPod Touch get classified as?

 

[Compile 'em all]

Short. To the point.

Gotta love Mr. Jobs!

 

[wilycoder]

I love Jobs' straight to the point answers lol

 

[Steve Jobs.]

I love you guys too

 

[mtzalex]

rude??

is it me, or is Steve just getting more rude every time??

he doesn't have to attack!! people are just asking questions...

his PR team should talk to him... or spank him hahaha

 

[Darkroom]

news flash! this just in: apple products are expensive.

 

[Steve Jobs.]

is it me, or is Steve just getting more rude every time??

he doesn't have to attack!! people are just asking questions...

his PR team should talk to him... or spank him hahaha

The head of a multi-billion dollar company is actually taking the time to respond to customer's questions PERSONALLY. Gimme a break.

 

[usarioclave]

Simple answer to simple question

Q: Why is the ipad more expensive in <country>
A: Taxes.
Q: Oh, really?
A: Yes.

 

[armoguy94]

The head of a multi-billion dollar company is actually taking the time to respond to customer's questions PERSONALLY. Gimme a break.

..and he's being an ******* while he is at it! If you are going to personally respond to a "valued" customer's question, then say it nice, especially if you are the head of a multi-billion dollar company.

 

[Bonch]

is it me, or is Steve just getting more rude every time??

Steve has always been like that.

http://www.businessinsider.com/appl...-re-adjust-to-steve-jobss-fiery-return-2009-8

I love the end. "No" and he walks out.

 

[nick9191]

Bit rude for a CEO. Not that I care, it's just normally they are all PR and horse ****.

Prices seem fair enough. Stuff costs more in the UK, the pound is shot to pieces, VAT is high, overheads cost more, fuel costs more, we pay a higher minimum wage. It would have been laughable to expect anything below £400 in the present climate.

 

[canadianmacguy]

I'm tired of these arrogant people emailing Steve Jobs directly to complain about things - what makes these people think they should email him about stupid stuff like this?

Sigh.. I miss the good old days when stupid people didn't buy Apple products..

 

[chocolaterabbit]

The head of a multi-billion dollar company is actually taking the time to respond to customer's questions PERSONALLY. Gimme a break.

Is he really? How do you know it's not his secretaries?

Also, with those kinds of answers, maybe it's better if he did leave it to his secretaries, if it was really him.

 

[FieryFurnace]

Apple products, espcially Macs, aren't that popular in Germany anyways - so why bother - German Apple Fanboys will buy the iPad no matter what price it has.

 

[Captain Magic]

..and he's being an ******* while he is at it! If you are going to personally respond to a "valued" customer's question, then say it nice, especially if you are the head of a multi-billion dollar company.

Agreed, but unfortunately the world has gone towards unfriendliness and rudeness lately, especially companies must I say. Is there an equivalent in English for "Client est Roi" ? It literally means the client is king.

Europeans complain a lot about high prices, they should really complain about high VATs, 17% doesn't sound right at all... it's a rip off. Anything above 8% should not be tolerated, you're paying the company (i.e. Apple) for the product, not the government or the EU.

 

[spillproof]

What? A copyright tax on something that can't even read a CD let alone burn one? Weird.

 

[extraextra]

LMAO I love his replies. He's so blunt.

 

[3N16MA]

Why are some posters upset or surprised by Steve's response? From what I have read about him he has always been straight to the point. He really doesn't come off friendly to some.

 

[extraextra]

What? A copyright tax on something that can't even read a CD let alone burn one? Weird.

At the bottom it says the iPad is classified as a "PC without a burner". I guess like a Macbook Air or a netbook?

 

[Millah]

Wow, all you who are saying that Steve is rude must not have been following him for very long. He's known for being upfront and short tempered.

But give me a break. I'd like to see how some of you all would respond being in his exact same position, having thousands and thousands of stupid people constantly sending you complaints and stupid questions. The fact that the CEO of Jobs' status actually has his address public and even RESPONDS to people is pretty amazing, especially at the rate he's been recently.

Work in customer service for a few years and you'll understand how whiney and stupid most people are.

 

[Will do good]

I'm tired of these arrogant people emailing Steve Jobs directly to complain about things - what makes these people think they should email him about stupid stuff like this?

Sigh.. I miss the good old days when stupid people didn't buy Apple products..

I agree with you, as soon as Apple become a consumer product any fool can buy it and they do.

I've been a Apple user for 20+ years. In some way, I liked with we were a small group without these whiners.

 

[Cleverboy]

The MacRumors article should mention the term "import duties", which I'm not sure the current language quite says clearly enough. I liked this post on the erroneous Slashdot article referring to the "Apple Tax" striking again:

Space cowboy (13680) * writes:
Friday May 07, @12:49PM

UK VAT (the equivalent of sales tax in the USA) is 17.5%

Removing the tax so we can compare fairly: £429 / 1.175 => £365.11

Converting pounds to dollars: £429 = $539.94 (currency [xe.com] rate is 1 GBP = 1.47884 USD)

So, the difference (before taking into account the import duties of ~10%) is $539.94 - $499.99 or ~$40.

Subtracting $53 (estimated) of import duty means Apple is charging less than they do in the USA.

Simon.

Cost of doing business indeed. Imagine if Apple charged much less, simply to gain U.K. parity on the final price with the U.S. It sounds like it would be a tremendously unsatisfying business decision in the long run. One commentor later says that there would be no import duty, because Apple did not include a "calculator" function. Whenever I see missing apps, I really wonder about these type of whacko unintended collateral damage that Apple is trying to avoid. I honestly feel the camera omission relates to Kodak and the juice not being worth the squeeze.

~ CB

 

[swingerofbirch]

I'd be rude to them too.......when I worked for Apple Online we got customers all the time that wanted to buy in the US to bring overseas and didn't intend to declare the items....they don't get that they have free college, free medical care, etc, because they pay sales taxes....it's rude to come here and take advantage of our cheap prices when you're receiving entitlements on the backs of those paying their fair share of taxes in your home country.

You can't compare prices when you realize a family in the US could spend up to $40,000 a year to send a child to college or if a family member got very sick they could rack up millions of dollars in medical debt within a matter of weeks......I have many relatives in Europe and I swear I don't know how they end up electing the progressive governments they do because they sound like the teabaggers back here. I will not generalize, but in their cases they don't deserve the government they have.

Be happy for your high taxes! It's partially why your countries work well.