ComiXology, VAT And Sales Tax

Posted by July 31, 2012 Comment

In Britain, any kind of reading material, from the Bible to pornography, is exempt from sales tax. As long as it’s in print.

Digital editions however receive the full whack of Value Added Tax, recently increased by the current government from 15% to 20%. Unlike America, tax payment is integrated into the shelf prices, so you never see what it would be without the tax, what you see is what you pay, and you don’t curse the government with every payment.

But there seemed to be a problem at digital comics distributor ComiXology, in that VAT isn’t charged, or if it is, it is absorbed into the price. When buying a ComiXology comic in the UK, the bill reflects the inclusion of VAT in the price, even though the system lists VAT as a £0.00 payment. Is that the US way of showing tax clashing with the UK standard of not showing it?

Recently however on the Android App, it appears that on some titles ComiXology were adding VAT on top. But not on others. There seemed to be little consistency with some titles from the same publisher reflecting an extra 20% on top and others not. It seems a real mystery. Some $1.99 titles were listed as either £1.28 and £1.52. A direct exchange rate would be £1.27…

It was an issue that ComiXology would only provide a “no comment” over. However after a Bleeding Cool reader asked questions, they tried to fix things by reducing this extra charge to zero when you ordered, but not changing the higher advertised price.

Now however, they seem to have fixed it completely. However, it may be worth checking for any prices over the last week to see if you were overcharged or not… and maybe foreshadowing of the price you may have to pay sometime soon.

Any suggestions from any tax experts out there? Will ComiXology have to put up prices? Could it, or Apple, be stung for a VAT bill on taxes that they haven’t collected?

Developing…

Cartoon by Peter Brookes from The Times

 

(Last Updated July 31, 2012 7:02 am )

Send this to a friend