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App Store and iTunes Prices in UK May Increase Up to 20%

appstore.jpgApple's iTunes and App Store downloads may see a price increase next year when new UK laws take effect.

The Guardian reports that the most recently introduced budget closes a loophole that allowed digital downloads to avoid UK taxes.
The budget document said: "As announced at budget 2013, the government will legislate to change the rules for the taxation of intra-EU business to consumer supplies of telecommunications, broadcasting and e-services. From 1 January 2015 these services will be taxed in the member state in which the consumer is located, ensuring these are taxed fairly and helping to protect revenue."
Digital download retailers such as Apple and Amazon presently avoid the UK's 20% VAT by selling from countries such as Luxembourg where the tax rate is only 3%-15%. Under the new law, downloads to UK customers will be taxed at the higher 20% rate. Apps may be least affected as they are presently taxed at the higher range of 15%.

The change appears to affect all digital downloads including music, apps, and e-books, and will take effect on January 1, 2015.

Top Rated Comments

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25 weeks ago
Apple should simply ****ing absorb the VAT. It's not as if they did not already profit enough from those tax leaks and make quite some money anyway.

You wanna make money in a certain country? Pay this country's taxes.
Just ridiculous to pay taxes in Luxembourg or Ireland but sell goods and services in a completely different country?
Rating: 52 Votes
25 weeks ago

The UK is such a joke.


Since I assume that you have lived in the UK (currently, or at some time) for some considerable period of time (otherwise the post would be...ah...ill considered), could you expand on the comment and explain why the UK is a joke.
Rating: 23 Votes
25 weeks ago

The UK is such a joke.


No, the US healthcare system is a joke. Things like the VAT support the NHS.
Rating: 22 Votes
25 weeks ago

Apple should simply ****ing absorb the VAT. It's not as if they did not already profit enough from those tax leaks and make quite some money anyway.

You wanna make money in a certain country? Pay this country's taxes.
Just ridiculous to pay taxes in Luxembourg or Ireland but sell goods and services in a completely different country?


You will alway pay any tax as a consumer. It's always you who will pay corporate taxes. I'm sure you will never understand.

Now you get what you wanted in first place. Pay your tax peon.
Rating: 20 Votes
25 weeks ago

Don't matter to me, I live in the U.S. Sorry UK


You just get to go bankrupt if you get health problems and don't have health insurance instead.....
Rating: 20 Votes
25 weeks ago

I'm a British citizen and I have lived there, thank you.

I could go on about a lack of rights, censorship in the extreme, lack of privacy, crime, ill-conceived immigration policies, and astronomically high taxes...but that'd be too easy.

It's reassuring to know that wherever you are in the world you can still get hold of the Daily Mail.
Rating: 15 Votes
25 weeks ago

Apple should simply ****ing absorb the VAT. It's not as if they did not already profit enough from those tax leaks and make quite some money anyway.

You wanna make money in a certain country? Pay this country's taxes.
Just ridiculous to pay taxes in Luxembourg or Ireland but sell goods and services in a completely different country?


Why in the world would Apple pay your sales tax? Any company sets the price they want for an item. Sales tax isn't a price increase, it's a charge your government imposed for the privilege to buy something. Don't like it? Complain to the government.

All of these things you demand for free are not free. Corporate taxes are added to product price. Mandatory warrantees are added to product price. 'Free' healthcare is paid for by higher taxes. Anytime you require a company or government to provide a good or service you're going to end up paying for it somewhere.
Rating: 14 Votes
25 weeks ago
Time to secure that US store account !
Rating: 10 Votes
25 weeks ago
Loophole? Isn't it just a new law with different %s and rules? Why do people assign grandiose terms to what laws say?
Rating: 10 Votes
25 weeks ago

Apple should simply ****ing absorb the VAT. It's not as if they did not already profit enough from those tax leaks and make quite some money anyway.

You wanna make money in a certain country? Pay this country's taxes.
Just ridiculous to pay taxes in Luxembourg or Ireland but sell goods and services in a completely different country?


Ok, let's play this game. App is £10. Currently, developer gets £7 and Apple £3. Under 1-Jan-2015 laws, and your proposal, Apple should, from their £3 profit, pay the £2 tax. Ok, the still make £1. What, then, stops the government from stating the VAT is 40% starting 1-Jan-2016. Should Apple then absorb that loss, too? So charge the customer £10, pay the developer £7, pay the government £4 and write off that £1 loss. Yeah, great idea.

This is going to come to the states soon enough. It is part of the problem that needs to be addressed because the laws have not kept up with the times.
Rating: 10 Votes

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