New tax law could see UK iTunes customers paying up to 20% more next year


Members of the UK government are seeking to close a tax loophole that currently allows online music, app, and book downloads to avoid the country’s 20% “value added tax” in favor of much lower international tax rates, reports The Guardian. If the push is successful, iTunes customers in the UK will instead be taxed at the appropriate rate for their own country.

However, the new law won’t go into effect until January 1, 2015, so there’s still time for things to change. Supporters of the change say that it will lead to more fair competition among foreign and domestic companies, since UK-based companies are currently at a major disadvantage due to the higher tax rate.

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  1. Let’s be honest, does this really warrant news…??? And anyone with any tech savvy would be buying in the much cheaper USA anyway, you register an account, buy a prepay iTunes card online with delivery via email, and just buy everything cheaper anyway…

    This will become even more common if this happens, and then the music industry will lose even more money, that is, of course for the people that PAY for there music downloads…

    • If you live in the UK well yes it does warrant as news! Currently the tax paid on digital services is about 3% as all services route out of Luxembourg and that’s their tax rate. And this is Apple and Amazon we’re talking about, the majority of who’s customers are NOT tech-savvy and won’t go to the trouble of finding out how to set up a US-based account and screw around with email-based gift cards.

    • lexxkoto - 9 years ago

      Buying things from the US iTunes store if you’re outside the US is a pain in the ass.

      You have to buy gift cards from a third party, which gives a bit of money to the middleman. Apple have started using IP geolocation to check you’re actually in the US when you open a new account. And the iTunes store’s terms and conditions makes it clear that you’re not entitled to buy things from the US store if you’re outside the US. If they wanted, they could close your account and you’d lose all your video content, since this is DRM’d. You’d also lose all your music that you hadn’t downloaded.

      Why go to so much effort to spend your money in a place where it’s obviously not welcome?

  2. nelmat - 9 years ago

    The article is incorrect, in the UK We currently pay the Irish rate of 23% this will equate to a reduction of 3%. Good times. :)

  3. vkd108 - 9 years ago

    Nothing to do with fair trade, it’s just about governments collecting money. They are never satisfied with the unlimited increasing billions.

    • PMZanetti - 9 years ago

      That’s what Tax is. Government taking money from people. The money flows away into the unknown, and the people are left with less. There is no good side to it, as the people never benefit from it. Never.

      You’ll have a bunch of amateur wannabe politicians tell you about all the things that “You don’t even realize get paid by your tax dollars.”

      Well you know that? Let me write the check. Don’t tax me, don’t take my money, not from my paycheck, not at the store, not when I buy a computer…..Send me my share of the bill for our schools. Send me my share of the bill for the police department. And If Feel like we’re managing those aspects of society properly, I will write the check for my share.

      There is no reason why it couldn’t be done in a legitimate society. There would be less tax avoidance, as people would have a much harder time not writing their check to pay for education, vs. a generic “tax” that is well known to be misused by criminals. The problem is, we don’t have that… a legitimate society….we have people who are civilian who’s money is stolen, and we have government that steals it, and misappropriates it as they see fit without any oversight or control. No one to stop government officials from lining their own pockets, or using it to fund some god awful program or weapon or other disaster.

  4. Sweden tried to do the same. EU law is clear. Dubble taxation is forbidden. You have to pay WAT in the country that you buy stuff for unless the store sells more then a specific amount. Then the store don’t pay local VAT but instead the selling countries VAT. for example: I don’t pay UK VAT when I buy there. I have to instead pay 25% Swedish VAT. If I buy something from I have to pay UK WAT but no WAT in Sweden.

    Sweden tried to take double VAT. The customers first had to pay Apple/Luxenburg VAT and then 25% VAT in Sweden. Somehow Apple won the trial and we only have to pay Luxenburg VAT on iTunes.
    = Same thing will happen with UK.

    Even if the UK government win its not that much different. Luxenburg VAT is 15% and UK VAT is 20%. So its 5% more.

    We as taxpayers and customers have to strike back against our greedy politicians:
    Register US AppleID = 0 VAT. Politicians have to learn that they can’t just raise taxes year in and year out. Here in Sweden the lowest tax rate for a worker is 75%. “High” income earners over 5000dollar/month have 85%+ tax rate. And they are raising taxes. Why work when the government gives away all the money to other people?