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E-books VAT cut gives Amazon the edge Thursday, 22nd December 2011
Pressure is mounting on the UK Treasury to cut VAT on e-books after Luxembourg signaled a controversial rate cut on the category.
The country’s decision to slash VAT rates for e-books from 15 per cent to 3 per cent is likely to have an impact on the UK’s book trade as Amazon, which houses its European operations in Luxembourg, can cut the cost of its e-books.
This move will reduce the advantage that bricks-and-mortar sellers enjoy, namely that there is no VAT on books, and it puts UK-based e-book suppliers at a competitive disadvantage because VAT is charged at 20 per cent throughout the nation.