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Amazon Overcharging Publishers For Tax 184

Posted by Soulskill
from the business-will-be-business dept.
00_NOP writes "Amazon is taking fire in the UK for insisting that publishers pay them for 20% VAT (sales tax) when in fact the online retailer is only paying 3% VAT. 'The firm is able to wield such power over publishers because it has a near monopoly of the UK digital book publishing market. According to reliable estimates, it sells nine out of 10 ebooks in the UK, while using its Luxembourg tax status to wring more profitable terms from publishers. ... In private, British authors and publishers express fears that Amazon's dominance will send the industry into further decline.' Given that the Kindle is rubbish at displaying maths and science and that Amazon is as dangerous a monopoly as Microsoft ever was, is it not time that regulators and consumers stood up to them?" Amazon is also facing criticism right now for allegedly shutting down a woman's account and remotely wiping her Kindle, then refusing to provide information about why it did so.
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Amazon Overcharging Publishers For Tax

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  • by Anonymous Coward

    that which can be adequately explained by stupidity.

    • by wisnoskij (1206448) on Monday October 22, 2012 @09:37AM (#41727941) Homepage

      So Amazon has completely cornered the market because of stupidity? how does not make any sense?

      • by Anonymous Coward on Monday October 22, 2012 @09:49AM (#41728045)

        Publishers insisting on DRM, engaging in infighting, and pushing multiple incompatible standards have given Amazon a device monopoly just like music publishers gave Apple. It's stupidity because they had five years to see what was coming. It's publishers monopolistic greed that enabled Amazon's position, and Jeff Bezos is laughing all the way to the bank.

        • Re: (Score:2, Flamebait)

          by jhoegl (638955)
          But corporations are job creators!

          Perhaps now people will realize the balance that must be maintained... but I doubt it.
      • by AK Marc (707885)
        Not because of, but despite.
    • by kilfarsnar (561956) on Monday October 22, 2012 @10:16AM (#41728309)

      Never attribute to malice that which can be adequately explained by stupidity

      I have heard this saying before. But I have never understood why I should consider it to be correct. Don't the malicious often feign ignorance?

      • by ShanghaiBill (739463) on Monday October 22, 2012 @10:35AM (#41728483)

        Never attribute to malice that which can be adequately explained by stupidity

        I have heard this saying before. But I have never understood why I should consider it to be correct.

        It shouldn't be considered correct. This saying is promulgated by malicious people in a conspiracy to conceal their actions. There is no way that common acceptance of such a broad generalization could be explained by mere stupidity.

        • by rahvin112 (446269)

          So you believe that 10 times out of 10 every time you are shortchanged at a cash register it's deliberate an intentional and not because the dumb ass can't count?

          That saying is generally true when involving individuals, because in general most people are honest and reputable in their dealings but people do stupid shit all the time by accident. If the saying wasn't correct then you should assume the guy at the register is a thief, that the guy that rear ended you was attempting to kill you and that when you

          • by isorox (205688)

            So you believe that 10 times out of 10 every time you are shortchanged at a cash register it's deliberate an intentional and not because the dumb ass can't count?

            If this were true, for every 10 times you are shortchanged, you should have another 10 times when you receive too much money. How often does that happen?

            • by DamonHD (794830)

              I think that I have been given excess money comparably often to being short-changed in retail, at a till or bar for example.

              And even commercially, goofs have often been in my favour.

              I do point out the errors in either direction generally, and thus keep my karma balanced!

              Yes, malice is around, but is usually fairly clearly separable from accident/cock-up IMHO.

              Rgds

              Damon

            • If this were true, for every 10 times you are shortchanged, you should have another 10 times when you receive too much money. How often does that happen?

              Actually this happens a lot. Stores tend to lose money on cash transaction errors every day, simply because people always complain if they are short-changed, but often don't when they receive too much change. I think that deliberate short-changing for the purpose of pocketing the surplus is rare, as the employer tends to watch people handling cash very closely.

              The behaviour of one local corner-shop was strange; they gave me correct change, but consistently dialed up a larger amount on the register, which wa

              • by isorox (205688)

                Normally it's the other way round as a tax evasion measure.

              • by Muros (1167213)
                A few months ago a girl at a drive-through gave me the change from a 50 when i gave her 20 euro. She even insisted I couldn't have given her a 20, because she didn't have any in the till. She'd handed it back to me as part of the change. I handed her back 30, told her I was absolutely sure, and left her looking very confused.
      • The problem is that many slashdotters seem to jump to conspiracy theory conclusions about *everything*, even if totally ridiculous.

        The next counterargument is usually that some conspiracy theories ultimately pan out, therefore all conspiracy theories are true. Or they'll justify extreme conspiracy theories if and only if they are against: the Government, the Corporations, Big X where X is an industry, Microsoft, Apple, Google, or what have you, in approximately that order, without considering that these o

        • Re: (Score:3, Insightful)

          by Hal_Porter (817932)

          The problem is that many slashdotters seem to jump to conspiracy theory conclusions about *everything*, even if totally ridiculous.

          How much are THEY paying you to say that?

    • by mcgrew (92797) * on Monday October 22, 2012 @01:26PM (#41730687) Homepage Journal

      mcgrew's razor: never attribute to stupidity that which can be explained by greedy self-interest.

  • by LordLimecat (1103839) on Monday October 22, 2012 @09:39AM (#41727965)

    Overcharging, potentially illegal actions? Pfft, who cares.

    Whats that, you say its bad at displaying maths and science? Someone get the firing squad.

    Seriously, what on earth do its shortcomings have to do with whether the government needs to take action?

    • Re: (Score:3, Interesting)

      by 00_NOP (559413)

      Because they are actively selling goods they must know to be unfit for purpose.
      What if a retailer sold you something they said was wine when it was simply water? Would you not think that was an issue even if they did it thousands of times and refused to stop when the problem was pointed out to them?

      • Re: (Score:2, Insightful)

        by Anonymous Coward

        I don't recall seeing the Kindle being advertised as a maths/science textbook replacement anywhere.
        Kindles don't support footnotes, which is also a pain but equally irrelevant to the issue of how much or little tax Amazon pay.

        • Re: (Score:2, Insightful)

          by 1u3hr (530656)

          I don't recall seeing the Kindle being advertised as a maths/science textbook replacement anywhere.

          "Amazon" didn't create the book, the publisher did. It's not up to Amazon to audit every text book they sell to see if it's correct. The publisher should have proofread it -- it's pretty simple to do, on the Kindle emulator that Amazon supplies for exactly that purpose. Kindle itself uses a subset of HTML in a specific font to display text. If that doesn't work, you have to use images. It does support GIF, JPEG, PNG.

          Probably the publisher just ran it through some automatic converter that couldn't handle

        • by DM9290 (797337)

          Kindles don't support footnotes, which is also a pain but equally irrelevant to the issue of how much or little tax Amazon pay.

          It supports hyperlinked end-notes and has a back-button, so unlike a real book its convenient to read the end-note and then return to your original position.

          Foot notes dont make much sense when a page is dynamically formatted to the size of the screen - if you had a foot note marker at the bottom of the screen then there would be no room on the screen for the actual foot note, which means the foot note would need to appear at the bottom of the following page, which is confusing at best.

      • by tsa (15680) on Monday October 22, 2012 @10:10AM (#41728235) Homepage

        Yep, they sold me a book about the evolution of storytelling. The paper version contained some figures that they just left out in the Kindle version. And that made the book unreadable. Thank you Amazon, I will certainly buy Kindle books from you again.

        • Re: (Score:2, Insightful)

          by Anonymous Coward

          Yep, they sold me a book about the evolution of storytelling. The paper version contained some figures that they just left out in the Kindle version. And that made the book unreadable. Thank you Amazon, I will certainly buy Kindle books from you again.

          I fail to see how this is Amazons fault. The publisher is responsible for converting books to Mobi and submitting them to Amazon. Blaming Amazon for an eBook that was missing figures would be like blaming them for spelling errors in a print book.

          • by lgarner (694957)
            Only the end result matters, not whose fault it is. If the Kindle versions aren't as good as the print version, then don't buy them. Easy answer. Unfortunately one has to get burned a time or two before coming to that conclusion, but to keep getting burned repeatedly would be dumb.
      • by CanHasDIY (1672858) on Monday October 22, 2012 @10:44AM (#41728549) Homepage Journal

        Because they are actively selling goods they must know to be unfit for purpose. What if a retailer sold you something they said was wine when it was simply water? Would you not think that was an issue even if they did it thousands of times and refused to stop when the problem was pointed out to them?

        Personally, I'd be far more concerned when they came to repo the "wine" they sold me, not for non-payment, but for some arbitrary reason they made up to justify said repossession without refund.

        Seriously, why is that not the bigger focus here? Amazon can repossess your digital stuff without refund or recourse!

        See, shit like this is why I only spend money on tangible goods.

    • by CanHasDIY (1672858) on Monday October 22, 2012 @10:47AM (#41728573) Homepage Journal

      Seriously, what on earth do its shortcomings have to do with whether the government needs to take action?

      The fact that a company can take something that you paid for from you, without just cause or fiscal reciprocity, is something the government should definitely take action against.

      If you or I did that to someone, we would be called "thieves;" why would Amazon be considered any differently?

  • by mwvdlee (775178) on Monday October 22, 2012 @09:43AM (#41727991) Homepage

    Surely this is merely a matter of tax laws that lawyers and judges are perfectly well equiped to solve?
    If Amazon is a Luxembourg company, than this should be no different from any other Luxembourg company buying and selling products outside Luxembourg borders. Europe has tax laws in place regarding intra-community trade; neither Amazon nor the publisher's opinions matter.

    • Re:Easy? (Score:5, Informative)

      by Anonymous Coward on Monday October 22, 2012 @10:10AM (#41728233)

      Surely this is merely a matter of tax laws that lawyers and judges are perfectly well equiped to solve?
      If Amazon is a Luxembourg company, than this should be no different from any other Luxembourg company buying and selling products outside Luxembourg borders. Europe has tax laws in place regarding intra-community trade; neither Amazon nor the publisher's opinions matter.

      The summary, once again, is not very clear. In fact the Guardian article isn't 100% clear either, but what appears to be the case is that for a product with an intended retail price of £10 in the UK where VAT is 20%, the base UK price would be £10 / (120%) = £8.33. Amazon allegedly insists on negotiating with UK publishers starting with a base price of £8.33. However, in Europe, Amazon is a Luxembourg company and the VAT rate there is 3% for these products. The base price for a retail price of £10 would be £10 / (103%) = £9.71.

      I don't think it is really the case that Amazon is "charging them VAT" so tax law doesn't really matter - it would be more accurate to say that they are allegedly insisting on at least an extra 17% discount, and hoping that the publishers don't notice that this is not in fact part of the VAT adjustment. Or alternatively, Amazon is accused of keeping all the tax savings it makes by setting up in the EU's lowest VAT area, Luxembourg, and not sharing them with the publishers.

      • by mooingyak (720677)

        Surely this is merely a matter of tax laws that lawyers and judges are perfectly well equiped to solve?
        If Amazon is a Luxembourg company, than this should be no different from any other Luxembourg company buying and selling products outside Luxembourg borders. Europe has tax laws in place regarding intra-community trade; neither Amazon nor the publisher's opinions matter.

        The summary, once again, is not very clear. In fact the Guardian article isn't 100% clear either, but what appears to be the case is that for a product with an intended retail price of £10 in the UK where VAT is 20%, the base UK price would be £10 / (120%) = £8.33. Amazon allegedly insists on negotiating with UK publishers starting with a base price of £8.33. However, in Europe, Amazon is a Luxembourg company and the VAT rate there is 3% for these products. The base price for a retail price of £10 would be £10 / (103%) = £9.71.

        I don't think it is really the case that Amazon is "charging them VAT" so tax law doesn't really matter - it would be more accurate to say that they are allegedly insisting on at least an extra 17% discount, and hoping that the publishers don't notice that this is not in fact part of the VAT adjustment. Or alternatively, Amazon is accused of keeping all the tax savings it makes by setting up in the EU's lowest VAT area, Luxembourg, and not sharing them with the publishers.

        That makes a great deal more sense. I was thinking that I'm pretty sure there are laws in just about every country in the world that money collected as a tax must be delivered to the government, which means that Amazon would not benefit from this approach.

      • by dabadab (126782)

        However, in Europe, Amazon is a Luxembourg company and the VAT rate there is 3% for these products.

        However, since Amazon is a large retailer, it does not pay VAT in Luxembourg, but in the buyer's country. I would venture to say that most of Amazon's EU customers do not live in Luxembourg so the tax rates there do not mean much.

      • by nospam007 (722110) *

        Since I'm from Luxemburg, you can imagine I'm not surprised, lots of companies have their site here.
        Anyway, those tricks will be over soon, the EU has already done its thing.

        But I _am_ surprised, that eBooks have actually a 20% VAT in England, that's the REAL shame IMHO.

      • If it's liable for 3% Luxemberg VAT the 20% UK VAT isn't due, so nobody paid it. I reckon it's just a coincidence, they could equally have hcosen 15 or 25% off as their baseline.

        Also, I fail to see why being based in Luxemberg has any effect on their suppliers at all.

        Summary is a bag of shit, but then so is the Groaniad article.

      • by AK Marc (707885)
        AT&T did that for years, amassing billions. Why? Because a rule was eventually laid against them (they were doing toll bypass, like everyone else, but weren't allowed to do so for regulatory reasons). When the ruling came down, they had collected the taxes they "didn't need to pay" and paid them. Amazon may have some guess that the UK will come after them or that the intrepretation of EU law given here isn't absolute (what happens if someone rules that a UK sale from amazon.co.uk in the UK to a UK r
  • Piling on? (Score:5, Insightful)

    by camg188 (932324) on Monday October 22, 2012 @09:46AM (#41728011)
    What does the kindle's failure to display math and science symbols correctly have to do with Amazon potentially being a monopoly?
    • Its basically what you could talk about as a E ink cartel. For some obscure reason, uknown to the common man, nobody has actually made a decent competitor to the current E Ink readers. As far as we consumers know, the marked only current color E Ink readers are made by a chinese company called Hanvon running Windows CE, and a overpriced product by a company called Ectaco which is markeded to students at a selling price of 500$.
      Why is that? B&N and Amazon have these low PPI monochrome ereaders, and yet n

      • by tsa (15680)

        And you really think Amazon wouldn't want to have a color e-ink reader? I guess they don't have one yet because a) the screen looks crap, or b) it's far too expensive to complete their existing monochrome e-reader line.

        • Beats me, but its still amusing that there is no E Ink reader competiton. Even handhelds such as the Gameboy had competition, even if most of it fell flat because they failed to copy the good parts of the gameboy.

          • by 0123456 (636235)

            Beats me, but its still amusing that there is no E Ink reader competiton.

            As I understand it, they all get their screens from the same company, and the tech is probably patented so no-one else can make them.

      • by Darundal (891860)
        So you are alleging a conspiracy by every producer of dedicated ereaders with eink displays (Amazon, Barnes & Noble, Kobo, Cybook, and a hojillion others) to keep expensive new screens produced by the same company that makes the screens they currently are using out of their product lines?
  • by dragisha (788) <dragisha@@@m3w...org> on Monday October 22, 2012 @09:49AM (#41728049)

    I am almost-buyer of Kindle and practically all I need from it is science and math... Thanks for tips, and I hope this is read widely. Maybe next year, or decade... But not before all devices are updated to normal-math, acceptable-tables and acceptable-pdf.

    There is another problem I was already aware of - PDF display is, by default, _awful_. I understand why's but I think it is not acceptable at all.

    • by fuzzyfuzzyfungus (1223518) on Monday October 22, 2012 @10:04AM (#41728193) Journal

      What I want to know is where the http://pixelqi.com/ [pixelqi.com] guys are hiding... They had a workable device, shipping in nontrivial volume with the OLPC XO-1, and then seemingly dropped off the map.

      All the refresh rate of an LCD panel(because it is one); but, in transreflective mode, looks more like e-ink than any LCD I've ever seen and has the option to do color if you crank the backlight....

      We know(because all but the nastiest LCD tablets running Android or iOS can and do do it) that contemporary low-power ARM chipsets are up to the challenge of crunching PDFs; but e-ink displays are mostly too small to display 8.5x11 or A4 pages, too slow for panning/zooming/etc, and PDF reflow is crap. If they would just start existing, the Pixel Qi screens would fairly efficiently solve this problem, at lower cost and lower power than standard LCD panels; but nobody seems to have heard a peep from them.

    • Re: (Score:2, Insightful)

      by tsa (15680)

      I understand my car can't fly but I think that is not acceptable at all either. Never again will I buy a car.

  • The Kindle Swindle (Score:5, Informative)

    by Anonymous Coward on Monday October 22, 2012 @09:51AM (#41728059)
    • Thankfully, it is axiomatic that Stallman Is An Extremist, so we needn't listen to his(often strident, as often correct) warnings!

      The awesome thing about the emerging DRM economy is that it combines the economic relations of feudalism with the efficient, data-driven surveillance that East Germany was too low-tech to achieve...

      • Well yes Stallman is an extremist, and is often over the top. Perhaps as often as not.

        But there are less strident voices that have been warning about DRM for a while. Like the one in my head.

        That's why I buy physical media, or at the worst DRM free media for anything I know I will want to keep long term.

        • by Darinbob (1142669)

          DRM is indeed a problem. It removes control from the user and places it totally in the hands of the distributor. Ie, Amazon's first notorious example here was recalling a book that they didn't really have permission to sell. Yes granted this was a problem, users should not have been able to have gotten this book. However had this been a print book the deed would have been done and it would have been up to the publisher to pay all damages, no one would have sent agents out to ever reader's home to repo t

      • by tuppe666 (904118) on Monday October 22, 2012 @10:21AM (#41728369)

        Thankfully, it is axiomatic that Stallman Is An Extremist,

        DRM is bad http://www.defectivebydesign.org/ [defectivebydesign.org] "Digital Restrictions Management is technology that controls what you can do with the digital media and devices you own. When a program doesn't let you share a song, read an ebook on another device, or play a game without an internet connection, you are being restricted by DRM." most users would argue wanting to do those things isn't extreme.

      • What Stallman and his zealots miss is that all those companies with DRM usually also provide some useful service; and, often, the utility of said service more than compensates for the inconvenience (and potential risk) of DRM. Examples include Steam, and, yes, Kindle. Which is why people will keep using them and ignore the doom-and-gloom warnings.

  • Having been this close to buying a Kindle, I'm glad I saw this warning first.

    Can anyone suggest a device with better PDF support?

    • Addendum: I meant support for math symbol display, though PDF support is obviously also a fairly essential feature.

  • Not Paranoid (Score:4, Informative)

    by the eric conspiracy (20178) on Monday October 22, 2012 @10:00AM (#41728143)

    And I thought I was just being paranoid about this sort of thing.

    When Amazon first went around deleting books off of people's Kindles I vowed I'd never buy one. Now it appears my apprehension was all too justified.

    I hear the Nexus 7 does a better job with pdfs than the Kindle. It appears to me that's the way I am headed.

    • by Joehonkie (665142)
      I bought a DVD of Star Trek comics (possibly the nerdiest thing I've ever done and that's saying a lot) at one point and I have been reading them on my Nexus 7 with Perfect Viewer with no real issues other than figuring out how to reset all the options (by default it's set up for right-to-left reading, among other things I wanted to change) and it's great for that. I have some other PDF stuff I should test it with but I'd say it's near perfect so far.
    • If you want to read PDFs on a device of that kind, you really want it to be able to render legible text in fit-page-to-screen mode. Which means a reasonably high DPI - the higher, the better, in fact. So, right now, the best device for reading PDFs is actually the "retina" iPad; but if I were you, I'd wait for Google to announce that anticipated Nexus 10" with 300 dpi.

  • Off line storage (Score:5, Informative)

    by mprindle (198799) on Monday October 22, 2012 @10:03AM (#41728173)

    "Amazon is also facing criticism right now for allegedly shutting down a woman's account and remotely wiping her Kindle, then refusing to provide information about why it did so."

    This is the exact reason why I strip the DRM from every Kindle book I buy and then store them in my own offline repository. Should Amazon ever decide to wipe my account I'll still have the books I purchased. The other advantage is I can use any e-reader I want w/o being locked to a Kindle.

    • by 00_NOP (559413)

      How do you do this?

  • by SternisheFan (2529412) on Monday October 22, 2012 @10:10AM (#41728239)
    So if this story is true as stated, and she has bought lots of e-books from Amazon, will Amazon refund her all the money she's spent on them? Or does Amazon just 'absorb' that $$$? I'd sue Amazon for actual damages, court and lawyer fees and damages. I can see the future of e-commerce, and this a bad trend starting here.
    • How do we know that this story is actually true, and not just some BS made up by someone who has an axe to grind with Amazon?

      • We don't, but if you read the linked article the sort of replies she was getting sound pretty legit. There are two Michael Murphys on LinkedIn working for Amazon in some kind of customer relations role, so that also lends credence.

        I work in anti-abuse at Google. This sort of thing happens from time to time. They clearly believe she is an abuser of some kind and for all we know she might be, I've seen plenty of very obviously bad users write public stories before, often about closed AdSense accounts. In fact

      • by BeanThere (28381)

        Because - what lends credence is that they name names ... so all this is very easy to verify internally at Amazon as either true or false, and if it's false, this blogger will be hit with so much legal crap so quickly that he will be financially ruined for life.

    • by Rogerborg (306625)

      I'd sue Amazon for actual damages, court and lawyer fees and damages

      Don't forget Class A Federal Violations of your Constitutional Shit and Junk.

      TFA notes that the broad lives in Norway, got her Kindle from Amazon UK and agreed to their T&C, and and was paying her kroner to Amazon US. So, sue who, where, and for what?

      Sometimes the answer is not "Ready-Aim-Lawsuit". A bit of pressure applied via the anger of a million neckbeards might be more effective.

  • by tuppe666 (904118) on Monday October 22, 2012 @10:14AM (#41728289)

    Having been totally baffled by the summery. Which is incredibly confusing. Nothing has changed, VAT works like it always does the final customer pays it ALL thats the books buyer paying 20% http://www.amazon.co.uk/gp/help/customer/display.html?nodeId=502578 [amazon.co.uk].

    This is purely about dodgy maths. Amazon make deals on percentage of Gross Price with the publishers the UK full retail price of the book [net price+20%vat], not on the net price + [Vat in Luxenbourg] 3%. where publishers would get a slightly larger piece of pie . Neither Amazon or the Publishers pay a penny in tax so I fail to see why this is an issue. A better argument would be to standardise of Amazon taking a percentage of the net price as opposed to gross price, but all this should not matter, its really whatever they have negotiated between themselves.

    This is a ridiculous Anti-Amazon article, I suspect to distract from the disgusting behaviour that Apple and 5 Publishers are involved in

    • by dcarmi (940742) on Monday October 22, 2012 @11:14AM (#41728835)

      Indeed you are right that VAT is a consumer tax. Transactions between companies are not VAT-rated (unless they themselves are the consumers). However...

      Due to a loophole, Amazon pay VAT for books sold in the UK to the Luxembourg Government (at 3%). I am no VAT expert and it is a stupidly complicated tax but it may well be that Amazon is forced to pay UK VAT on ebooks it buys from UK publishers because they are the end of the chain and seen as the consumer for UK tax purposes. In fact Amazon UK is classed simply as a distributor. The real business is in Luxembourg

      Amazon now class themselves as just a distributor in the UK with their main business located in Luxembourg. On UK sales of £3.3 billion last year they paid precisely no UK tax. Amazon in Luxembourg employ 134 people, who must work very hard indeed compared to the 2300 box pushers in the UK. Amazon also get a Federal tax credit in the US because they pay (ahem) tax abroad. This means they pay less than the standard rate (35%) companies would normally pay.

    • by DaveGod (703167)

      Yeah I'm an accountant and was wondering WTF the problem is with the VAT.

      Amazon does not charge the publishers 20% VAT, the publisher applies 20% VAT when it bills Amazon.

      The issue appears to be - or I should say could be since the article is worded so poorly I am reluctant to give the benefit of the doubt - that when negotiating the publisher's royalty, they are firstly taking the gross selling price to the consumer and then assuming 20% of that goes to the tax man when actually it is 3%.

      Thus, say we have

  • This is not only a problem for publishers (which pay 20% instead of 3%) but also for the equivalents of the IRS. Amazon is paying a lot less taxes than it should in other countries by leveraging that extra 17% in two ways: benefits, and gaming the input/output VAT.

    • by tuppe666 (904118) on Monday October 22, 2012 @10:37AM (#41728499)

      This is not only a problem for publishers (which pay 20% instead of 3%) but also for the equivalents of the IRS. Amazon is paying a lot less taxes than it should in other countries by leveraging that extra 17% in two ways: benefits, and gaming the input/output VAT.

      No that is not what is happening the Publishers pay Nothing; Zero; Zilch; Nada; Nothing. Amazon also pay Nothing; Zero; Zilch; Nada; Nothing. The *Final* customer pays the standard rate which is 20% in the UK and the Government gets it ALL.

      VAT does not work like you think it does. Businesses do not Pay VAT.

      • by mrbester (200927)

        In other words, VAT is not levied on a seller, but a buyer. If Amazon charges 20% for the privilege of reselling your product then that isn't VAT as none of it is paid to the Govt. but a massive cash grab to the detriment of the producer. They also charge a download "tax" to the producer if the e-book costs less than £10.

      • by paugq (443696)

        VAT does not work like you think it does. Businesses do not Pay VAT.

        Sorry pal, but that's not how VAT works.

        There is input VAT and output VAT.

        Businesses do pay VAT, except for later they "cancel" it thanks to the input/output VAT compensation.

        But that's only if input VAT and output VAT are at the same percentage. If you are paid 3% VAT by Amazon but you have to pay 20% VAT to IRS, then you are in trouble. That's exactly what publishers are complaining about.

        • by tuppe666 (904118) on Monday October 22, 2012 @11:46AM (#41729225)

          VAT does not work like you think it does. Businesses do not Pay VAT.

          Sorry pal, but that's not how VAT works.

          There is input VAT and output VAT.

          Businesses do pay VAT, except for later they "cancel" it thanks to the input/output VAT compensation.

          But that's only if input VAT and output VAT are at the same percentage. If you are paid 3% VAT by Amazon but you have to pay 20% VAT to IRS, then you are in trouble. That's exactly what publishers are complaining about.

          I'm not your PAL. Your absolutely right that that there is "output vat" and "input vat", the business gives the *difference* to the government. The Final Customer Pays ALL the VAT!!! The other businesses just collect chunks of it along the way :) hence the *Added* bit. VAT does not work like you think it does.

          The Publishers are complaining they are getting a smaller piece of the pie after discounts have been negotiated, as they are worked out on 120% of the net price not 103% of the net price. Try the maths yourself. Again neither the publishers nor Amazon pay a bean in VAT. Its about dividing the net cost!!

        • by BeanThere (28381)

          Businesses do pay VAT, except for later they "cancel" it thanks to the input/output VAT compensation.

          Lol .. so in other words, they don't pay that VAT, which is what tuppe said.

          It is even right in the name of "VAT" that businesses (intermediaries) do not pay it - "Value Added Tax" - i.e. it's a tax on the end-points of the value chain. Businesses "collect" VAT.

          It's just a matter of accounting that the two effectively partly cancel one another out.

  • Isn't it fraud to charge somebody for a tax then not pay the money to the government? This is true whether they really owe 20% and pay 3% or owe 3% and lie to customers they need to collect 20%.

    • by tuppe666 (904118)

      Isn't it fraud to charge somebody for a tax then not pay the money to the government? This is true whether they really owe 20% and pay 3% or owe 3% and lie to customers they need to collect 20%.

      ...but that is not what is happening. Its also not what this article is about. Its incredibly confusing its about the starting price for discount negotiations, neither Amazon or the Publishers pay VAT.

  • Related link... (Score:5, Interesting)

    by SternisheFan (2529412) on Monday October 22, 2012 @11:25AM (#41728971)
    From BoingBoing's Cory Doctorow, a former bookseller himself. http://boingboing.net/2012/10/22/kindle-user-claims-amazon-dele.html [boingboing.net]

    "If it's a choice between paving the way for tyranny and risking the loss of your digital life at the press of a button by some deceived customer service rep, and having to remember a password, I think the password is the way to go. The former works better, but the latter fails better. A note to anyone from Amazon PR contemplating sending me a comment regarding this: I expect that any comment from Amazon regarding this story will disclose whether and when Amazon can delete files (including files loaded by users) from Kindles, and whether DRM-free files can still be deleted. Also: as a policy, I do not quote anonymous spokespeople for firms unless they are telling me something that could cost them their jobs."

  • by jouassou (1854178) on Monday October 22, 2012 @11:26AM (#41728983) Homepage
    I bought a kindle about a month ago, and use it exclusively to read math and science. I'm a third year physics student, so most of the content is full of greek letters, mathematical notation, and stuff like hats and bars on letters. Of the 30-40 documents I've tried to read on it so far, I've only stumbled on a single document with a rendering error (where e^(-E) has the exponent pushed into the base number)...
  • by Altanar (56809)
    And winner for most one-sided Slashdot submission goes to...
  • I have to say, at least with price fixing, it would be possible for something to attempt to compete with Amazon. Now they can't and there is no reason for Amazon to improve their tactics. Price fixing isn't ideal but rather than just fixing that, they should have got rid of the price fixing while at the same time enforcing open formats so people can leave kindle whenever they want or buy books anywhere without worrying about compatibility.

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