In my previous post on the January 2105 changes to the VAT system in the EU, the focus is on Amazon since the VAT changes mean a change to Kindle Direct Publishing’s pricing system and royalty structure. However, authors need to be aware that these changes do not affect only Amazon, they affect all ebook sellers across the EU.
Kobo’s system is currently VAT-inclusive for the EU, so authors will not see a change to Kobo’s system; however, authors will see a change to their royalty payments since VAT is deducted before the royalty is calculated. Moreover, watch for any changes to your royalty level if you are priced at the lower end, where ebooks priced below specific thresholds are paid at 45% instead of 70%: Kobo do not automatically adjust your price to keep it in the 70% band.
For those distributing to Apple, Apple treat your prices as either tax-inclusive or exclusive depending on whether you sell to Apple directly or via an aggregator. Pay attention to changes.
For those who contract directly with B&N, prices for the EU are tax-inclusive, so again watch for changes to your revenue.
And of course there is the added dimension of the automatic price-matching clauses in most of our distribution contracts: pay attention to your new prices in January because an automatic adjustment by the likes of Amazon could trigger lower prices elsewhere.
And lastly, do not forget the other players such as Google if you sell to them via an aggregator: you may need to adjust your prices. This may get expensive if your aggregator charges for metadata changes.