VAT Cut on eBooks in Luxembourg May Affect UK Book Trade

Earlier in the month, the authorities in Luxembourg decided to introduce a significant cut to the existing Value Added Tax on electronic books following which experts are of the opinion that the move could eventually end up altering the status quo of the digital book market in the UK.

According to the new policy adopted by the officials in Luxembourg VAT rate for eBooks is going to drop to 3 per cent from the earlier 15 per cent. The new VAT rate will definitely be accompanied by digital book vendors introducing a price cut in their offerings as well.

As per EU rules, consumers are required to pay taxes based on the country where the vendor is based in.

This means even though the UK government seems to be reluctant in introducing a similar cut down in the country's VAT rate on eBooks, the consumers within the country are likely to be much benefited by Luxembourg's decision. Especially since Amazon, which happens to be one of the most prominent forces in the digital book market, is based in Luxembourg itself.

[Via: FT]