Posts Tagged New EU VAT rules for e-books

Updated for 2015 – Kindle Direct Publishing for Absolute Beginners

In February 2014 I pulled together everything I’d learnt about publishing a Kindle e-book and produced Kindle Direct Publishing for Absolute Beginners. This concise e-book covers everything a writer needs to know in order to publish their first Kindle e-book and it’s written in simple language. Kindle Direct Publishing for Absolute Beginners

But nothing stays the same and over the last twelve months there have been some changes over at Amazon KDP. For example, UK writers who enter their National Insurance number in the Amazon on-line tax interview (not as scary as it sounds!) no longer have 30% tax withheld on their US royalties, pricing for EU Amazon sites is now inclusive of VAT (see my previous blog post for more information) and it’s now possible to allow pre-orders of a new e-book before it is published.

Therefore, I have updated Kindle Direct Publishing for Absolute Beginners to reflect these changes plus a few more bits and pieces, such as the advent of Kindle Unlimited allowing e-books enrolled in KDP Select to be borrowed and earn royalties and the ability for authors to run paid-for ad campaigns on Amazon.com.

So, if you’re thinking about e-publishing a collection of short stories, a ‘how-to’ book or a novel then Kindle Direct Publishing for Absolute Beginners will show you the way – and it currently costs less than a nice coffee (but I’m toying with the idea of putting it up slightly to reflect the extra work that’s gone into it).

And remember, the nice thing about e-publishing is that anything goes! There’s no rules about genres or word counts – as long as the product description and price reflect the content.

Extract from one of several 5* Amazon reviews:
“The field of e-publishing through Amazon’s Kindle Direct Publishing is full of tall grasses and hedges, but Sally’s straightforward advice offered a tidy path for my first foray into becoming an online author! Easy-to-read, this guide is clearly written by a writer who has experience with the format, and can either be read as a standalone account or dipped into as you’re on the Amazon website.”

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E-Books and New VAT Rules

Last week I (like all Amazon authors) received an email from Amazon about changes in the VAT rules for e-books. This change comes into effect on January 1st 2015.

Previously (i.e. pre-Jan 2015) VAT on e-books was calculated according to the seller’s country but under the new rules, VAT rates will depend on the buyer’s country. Previously, VAT on Kindle e-books was 3% because Amazon’s headquarters (Amazon are the sellers) are in Luxembourg. Now, for UK e-book buyers it will rise to 20%.

Amazon will automatically change all list prices of existing e-books to reflect this change. This means that Kindle e-book prices are on the rise. The British government will benefit but readers of e-books will lose out.

Previously the lowest price possible on Amazon UK for an Indie e-book, with the author choosing 35% royalties, was 77p. From the 1st Jan 2015 this will rise to 99p. The lowest possible price with the author choosing 70% royalties was £1.53, this will rise to £1.99. The Amazon information page on this is here.

The moral of the story for readers? Stock up on e-books before the end of the year, or face a steep price hike! If you were planning on shopping for a Kindle or tablet in the January sales, download the free Kindle app to your PC and buy your books now to read on your new Kindle later.

The moral of the story for Indie writers? I’m not sure. We’ll have to wait and see if the new, higher prices send the customers running back to print books. Let’s hope not!

Another word of warning – if you sell e-books directly from your own website, it is your responsibility (whether you are currently VAT registered in the UK or not) to implement the new rules i.e. you must charge VAT according to the buyer’s country and then pay the VAT to the relevant government. I’ve found two interesting links on this topic Rachel Andrew has written a blog post  and Juliet E. McKenna has put together another useful post.

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