EU VAT response – Amazon
EU BYERS! THEY WILL NOW QUOTE LIST PRICES INCLUDING VAT.
AUTHORS! YOUR ROYALTIES WILL BE BASED ON LIST PRICE *LESS* RELEVANT VAT.
Here’s a summary of changes:
List Prices: We’ve added applicable VAT based on the primary country of the marketplace to the VAT-exclusive list prices for all of your books on the EU marketplaces. You will see your updated list price with the applicable VAT added on your KDP pricing grid; you will also see the price without VAT which is what you can use to calculate your estimated royalties.
Minimum and Maximum List Prices: The minimum and maximum list prices for the 35% and 70% royalty plans in the EU have been updated to include VAT. Books must be priced within the new ranges. If your list price falls outside of the new range we will adjust it to meet the new minimum or maximum to ensure you remain in your chosen royalty plan. Learn more about the new minimum and maximum list prices: https://kdp.amazon.com/help?topicId=ANRML55B0BWBK
Price Matching: As always, if you list books with a lower list price on other sites, we may price match to the lower price. We recommend you review your list prices on or after January 1st to determine if you need to make any updates.
List Prices Based on Your U.S. Price: If you select to match the EU marketplace prices automatically from the U.S. list price, we will convert the U.S. list price to local currency and that will be the list price that includes VAT, we won’t add additional VAT onto that price. Learn more about setting list prices for EU Kindle stores: https://kdp.amazon.com/help?topicId=A30464Q6OVH578
Detail Pages: The price on your EU detail pages will be updated to show the new VAT-inclusive list price that you see in your KDP account. These updates will start on January 1st and will continue over the next few weeks.
Royalties: Any sales that occur before your price is updated on your detail page will be adjusted so that you earn the right royalties. We will manually adjust your royalties so that they are based on the VAT-exclusive price that you provided before January 1st. Once your list price is updated on your detail page to include the applicable VAT, we will pay your royalties on the VAT-exclusive price. Learn more about how EU prices affect royalty payments: https://kdp.amazon.com/help?topicId=A30XCAGX3E5QDC
Pre-orders: For pre-orders placed before January 1, 2015 on books that will release after January 1, 2015, we will pay your royalty as though VAT were still only 3%.
Kindle Countdown Deals: Any Kindle Countdown Deals scheduled on Amazon.co.uk on or after January 1, 2015 will run as expected, even if the list price does not fit the new requirements of being priced between £1.99 and £15.99, including the VAT.
Lastly, as of January 1, 2015, Italy has put in place a new law. Applicable VAT for eBooks sold in Italy will depend on whether the book has an ISBN. All eBooks with an ISBN will have a 4% VAT rate and eBooks without an ISBN will have a 22% VAT rate. This is the rate that is added to your price on January 1st and is the rate deducted when an Italian customer purchases your book. If you obtain an ISBN after January 1st, the 4% VAT rate will then apply for future sales but we will not adjust your list price automatically.
We hope you find this information useful and encourage you to review our Help pages any time.
The Kindle Direct Publishing Team
Yes, since Amazon Media EU Sarl (AMEU) is the seller of record for eBook sales in European Union Kindle stores, AMEU collects and pays the VAT for these sales. Publishers do not need to collect and pay VAT themselves for these sales.
I hope this helps. Thanks for using KDP.
Starting January 1st, for any titles already published in KDP, we will make a one-time adjustment to convert VAT-exclusive list prices provided to us to VAT-inclusive list prices. Subject to minimum and maximum thresholds, we will add the applicable VAT based on the primary country of the marketplace to the VAT-exclusive list price provided. For example, if an author had previously set £5.00 as the VAT-exclusive list price for amazon.co.uk, the new VAT-inclusive list price will be £6.00 because the applicable VAT rate in the UK is 20%. Please note, if an author had set a consistent VAT-exclusive list price for all Euro based Kindle stores, those prices will now be different due to varying VAT rates for the primary country of each Kindle store. For example, if an author had previously provided a €6.00 VAT-exclusive list price for amazon.de, amazon.fr, amazon.es, and amazon.it Kindle stores, the list prices including VAT will be €7.14 (19% VAT), €6.33 (5.5% VAT), €7.26 (21% VAT), and €7.32 (22% VAT) respectively.Minimum and maximum list prices for the 35% and 70% royalty plans will now also include VAT. For books published before January 1st that would fall outside these new limits after VAT is included, we will adjust the list price to ensure the book remains in the same royalty plan that was previously selected.Learn more about the new minimum and maximum KDP EU list prices:
https://kdp.amazon.com/help?topicId=ANRML55B0BWBKRoyalties will continue to be calculated based on the list price without VAT. The amount of VAT applied depends on the country where the customer is located. Consider a book with a £6.00 VAT-inclusive price on Amazon.co.uk, for sales to customers in the UK we would apply the UK’s 20% VAT rate and the price we use to calculate royalty would be £5.00. The 23% Irish VAT rate will apply to purchases from Ireland, so a customer buying from Ireland would still see £6.00 but, applying the 23% Irish VAT rate, we would calculate royalty based on the VAT-exclusive list price of £4.88.Learn more about how EU prices affect royalty payments:
https://kdp.amazon.com/help?topicId=A30XCAGX3E5QDCeBooks available for pre-order, scheduled to release after January 1, 2015:
For pre-orders placed before January 1, 2015 on books that will release after January 1, 2015, we will pay your royalty as though VAT were still only 3%.eBooks scheduled for a Kindle Countdown Deal:
If you currently have one or more books scheduled to run a Kindle Countdown Deal in the UK marketplace during or after January 1, 2015, your book will still be eligible to finish that promotion, even if the list price does not fit the new requirements of being priced between £1.99 and £15.99, including the VAT.Setting List Prices for EU Kindle stores:
Starting January 1st, to make it easier to set customer friendly list prices without having to calculate VAT for each country, authors will set list prices for EU marketplaces that include VAT. To accommodate this, the KDP pricing grid will be updated to accept VAT-inclusive list prices. Previously, if an author wanted to provide a suggested list price of “£1.99”, he would have to set “£1.93” as the VAT-exclusive list price to account for the 3% VAT we would have applied. Now, authors can simply enter “£1.99” and we will deduct the applicable VAT to calculate royalties. In the pricing page, authors will also see their suggested price without VAT displayed for the primary country of the marketplace to help them understand how royalties will be calculated for sales to customers from that primary country.For those authors who set their EU marketplace prices automatically from their US list price, we will convert the US list price to local currency and that will be the list price that includes VAT. For example, if an author sets the US list price to be $10.00, then we will convert that price to Euros for the German marketplace, and assuming the exchange rate is 0.8, the Amazon.de list price including VAT will be €8.00. For purchases in Germany, we would deduct 19% VAT and calculate royalty on a VAT-exclusive list price of €6.72.Learn more about setting list prices for EU Kindle stores:
As always, if an author list books with a lower list price on other sites, we may price match those books to the lower prices. We recommend authors review their list prices that include the new VAT on January 1st when these changes go into effect to determine if they want to make any updates.
We think that respecting your VAT-exclusive list prices and keeping books in their chosen royalty plans offers the best experience for authors. If you would like your books to be handled in a different way, contact us with your feedback:
Kindle Direct Publishing Team
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