A change in UK tax law that may take force at the start of 2015 would push the price of apps, music and other downloads and “e-services” higher in the United Kingdom.
The legal shift would see downloads charged the value added tax (VAT) of that country. Currently, The Guardian reports, companies like Apple and other digital store owners “are allowed to sell digital downloads through countries such as Luxembourg, where the tax rate is as low as 3%.”
International tax law has been good to technology companies, but this particular little riff is coming to the end of its coda.
In practice this should mean that charging a pound for a song is over, and that the cost to consumers for books, apps, and other digital content will rise at once. Naturally, a higher price will limit consumption, and likely induce some to piracy.
Why would the UK make the change? Simply put, the income. The Guardian also reports that revenue could reach as high as £300 million for the government. The app economy it appears is large enough that the state wants a piece.
How to tax online purchases is a topic of interest across the pond as well, with the United States currently wrangling with how to levy sales tax on retailers such as Amazon in a uniform, and functional way.
If you live in the UK, keep in mind that this could be your last year at a discount.
IMAGE BY FLICKR USER Kārlis Dambrāns UNDER CC BY 2.0 LICENSE (IMAGE HAS BEEN CROPPED)
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