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Steve Jobs Weighs in on iPad International Pricing and Taxes


With Apple's announcement on Friday regarding availability of the iPad in nine new countries later this month, a number of potential customers expressed dismay at the apparent higher prices in those countries relative to those in the United States. Several of those customers took the time to email Apple CEO Steve Jobs with complaints on the issue, two of whom shared his identical responses with us.

Please educate yourself. UK prices must by law include VAT, which is around 18%. US prices do not include tax.

Value added tax (VAT) is similar to the sales tax that is familiar to most residents of the United States, but is applied uniformly throughout the country for a given type of item and is included in the advertised pricing. Sales tax in the United States is not included in advertised pricing, as it varies significantly by region, even down to the municipality level.

The standard VAT rate in the UK is 17.5%, meaning that the 429 base price for the 16 GB Wi-Fi iPad in the UK is actually only 365 in "pre-tax" pricing. At current exchange rates, this corresponds to approximately $540 in the United States, or an approximately $40 premium for U.K. customers. While the price difference is not insignificant, it is considerably smaller than it might appear at first glance.

Apple has long offered somewhat higher international pricing on his products than it does in the United States, even accounting for difference in taxation practices. These differences are possibly due to increased overhead for distribution and "cost of business" in other countries, as well as the need to account for foreign exchange rates that can fluctuate over time.

Meanwhile, users in Germany have discovered that their iPad prices are higher than in other European countries, even when accounting for tax differences. At least one reader also emailed Jobs about this issue and reported to fscklog that he noted a special copyright tax imposed by the government there.

Blame your government. Germany just added a new copyright levy for computers.

The report notes that iPad prices in Germany are about 15 euros higher than those in France and Italy, with the extra copyright tax being applied due to the iPad's classification as a "PC without burner".

Top Rated Comments

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23 months ago
The noted prices for Canada are more expensive too, even though the dollar is pretty much at par. http://www.cbc.ca/technology/story/2010/05/07/tech-apple-ipad-canada.html
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23 months ago
In Germany, what does the iPod Touch get classified as?
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23 months ago
Short. To the point.

Gotta love Mr. Jobs! :p
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23 months ago
I love Jobs' straight to the point answers lol
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23 months ago
I love you guys too
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23 months ago
is it me, or is Steve just getting more rude every time??

he doesn't have to attack!! people are just asking questions...

his PR team should talk to him... or spank him hahaha
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23 months ago
news flash! this just in: apple products are expensive.
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23 months ago

is it me, or is Steve just getting more rude every time??

he doesn't have to attack!! people are just asking questions...

his PR team should talk to him... or spank him hahaha


The head of a multi-billion dollar company is actually taking the time to respond to customer's questions PERSONALLY. Gimme a break.
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23 months ago
Q: Why is the ipad more expensive in
A: Taxes.
Q: Oh, really?
A: Yes.
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23 months ago

The head of a multi-billion dollar company is actually taking the time to respond to customer's questions PERSONALLY. Gimme a break.


..and he's being an ******* while he is at it! If you are going to personally respond to a "valued" customer's question, then say it nice, especially if you are the head of a multi-billion dollar company.
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