Amazon and Apple, amongst other corporate giants in the ebook marketplace, have located themselves for EEC tax purposes in Luxembourg for the last few years. With a local rate of VAT (Sales tax) of 3% this is much lower than the 20%+ payable in most EEC countries. Now action has been taken to close this loophole but it does mean that every publisher selling to consumers in the EEC must be aware of the changes and take appropriate action.
Sales of ebooks from businesses to consumers (B2C sales) must have VAT added when the purchaser is located in any of the 28 EEC countries. Until the start of 2015 this VAT has been added at the rate applicable in the Publishers/Suppliers home country, not the Purchasers. As a result, companies like Amazon have been able to add 3% instead of 20%+ to their prices and substantially undercut similar publishers based in the targeted countries. To close this loophole the EEC now requires VAT to be charged at the rate applicable in the customer’s country, not the suppliers. This means applying the correct rate for each country for the product sold, and ensuring that the home country of the purchaser is known and recorded.
To avoid a publisher or service provider having to register with the tax authorities in all 28 EEC countries, a system known as VAT MOSS (Mini One Stop Shop) has been introduced. With this system we now add VAT at the appropriate rate to sales of secure PDFs made via our Managed Services facilities within the EEC. We then report the amount, country-by-country, via the MOSS service in the UK, and the UK tax authoriities will reconcile the taxes due to each EEC member state. What this means is that customers of our Managed Services will not have to worry about the new regulations, but DIY service publishers will need to register for the VAT MOSS service and account for VAT if they are selling to EEC consumers.
The UK VAT people (HMRC) expected 5000+ businesses to register for VAT MOSS – it is claimed that c.350,000 have done so!
If you would like to discuss our managed services please contact us
There has been a massive amount of discussion about the introduction of these charges, as evidenced by topics on Twitter #VATMESS and press articles. For more information on the UK implementation of VAT MOSS please click here
The Kindle Fire range of devices is Amazon’s answer to demands for a more functional device than the basic Kindle. All the more recent versions run an amended variant of the Android operating system, tailored to be Kindle-like, but also capable of running a wide range of applications. However, these applications are generally only available from the Amazon app store, not from Google Play or other Android app stores. Furthermore, Amazon’s terms and conditions for apps hosted on their App Store include requirements to pay them a substantial royalty if an app from the store is used to “sell” an item, such as a publication or training course materials. So what is the solution for PDF publishers? Well, Javelin for Android will run on Kindle Fire devices – see below for more details.
Javelin for Kindle
The Javelin secure PDF reader for Android is compatible with Kindle Fire (KF) and is easy to install and run… The screen resolution on the KF 7inch model is 800×1280, so not bad (much cheaper but not nearly as good as the new iPADs), and its dual 1.5Ghz processor is fast enough for even the most demanding of PDFs. We tested it on a couple of the largest documents distributed by our customers. These books have around 1000-2000+ pages and a large number of images and links. They load in a couple of seconds from completion of downloading, and because the entire document is held in virtual memory, they are almost instant when accessing any page.
Installing and running the Javelin app
Installation of Javelin on the Kindle is quick and simple – full details are provided here. To run the app you simply touch the Javelin icon and the Home page opens. For many users the documents they wish to view will be included within a catalog, either the built-in Catalog or a separate downloadable catalog of books, training materials or other documents. The publisher creates these and explains to end users how to download them. Touching the cover of a title in a catalog then downloads that book or document.For standard PDFs the file may then be opened immediately, whilst for secure PDFs (drmz files) an authorization code is usually required, after which the file may be opened and read.
If the Kindle Fire is your preferred reading device for ePUB books, newspapers and other materials, it can also be used for standard and secured PDF reading. As most Kindle Fire devices are quite small and not very high resolution it is best used for PDFs where the font is larger, the page sizes are smaller than standard, and/or the materials are graphical. It is also good for holding reference documents, where the user wishes to select an item and can zoom in to check details, rather than reading lengthy blocks of text.
A fascinating insight into the ebook market also comes from the International Publishers Association (IPA) – from their Global Market report. A copy of their most recent report is available on our Documentation and Publications webpage, from which we have extracted the diagram below. It shows the market share by value, in $Billions, of the global media and publications marketplace. What is notable about this diagram is the continuing size of the publications market, both for books and magazines. Elsewhere in the report they highlight the concentration of publishing in specific countries, and the rise of ebooks and how they can offset some of the loss in revenues from print publications. Have a read of the full report by downloading the PDF on our Documentation and Publications webpage