There’s this whole VAT thing with the EU, where blah blah blah. Pricing difficulties blah blah blah. Rock and a Hard Place.
I’m very sorry to say that at Nook, I have set all my books to US only. For now, it won’t be possible to buy Nook versions of my books outside the US. I hate that. Hate. It. But Nook has made it impossible to correctly account for VAT and the laws in certain countries that require book prices to be the same everywhere in that country.
Amazon aggressively prices-matches Nook, including Nook in the UK. I know this because a few weeks ago it took Amazon UK all of 3 hours to price match a Nook UK price change to .99 while Amazon US did not match for a couple of days.
Nook Press does three things that make it impossible to comply with the laws.
1. They require US-based authors to provide a price that does NOT include VAT.
2. They allow only one price for the entire EU
3. You can choose US-only OR all three: US + UK + EU.
This means I cannot be in Nook UK, because that option also puts me in the EU.
This means it is not possible to comply with Fixed Price Laws.
It also means that I can’t be at Nook at all with books where my traditional publisher has only North American rights, but that’s been true forever. I’m just complaining is all.
As an aside, it is also impossible to comply with Nook’s expectation that my Nook prices will not be higher than the prices I set at other vendors.
If I keep my books on sale at Nook with the current state of affairs at Nook Press I would be unable to match my prices across the EU vendors AND I would have different prices at Nook.de, Amazon.de, iBooks de, etc when the law requires them to be the same. The same would be true of France. I would get a nasty-gram from Amazon informing me of the price discrepancies and, since I would be unable to address them, Amazon could either price match or remove my book from sale.
The problem of different German prices (or French etc) is not a price matching issue. This is a regulatory issue, and Amazon is the one who will hear from the German authorities about not complying with German law. Amazon might have to take my book off sale in order to continue doing business in Germany.
(I would expect Nook to be hearing from France and Germany about this when/if those authorities notice that Nook prices are out of compliance, which they will be.)
This is not a risk I wish to take. Since my Nook sales are something like 99% US, I suppose my decision affects only a few readers. (Please contact me if you are one of those readers.)
The Longer Explanation
Three of the major vendors for self-publishing authors, Amazon, iBooks, and Google, make it possible to behave like a normal business and set prices in the various EU countries that account for VAT and also price books to end in .99. I can decide whether I will round down to a .99 price or round up to one. They also allow authors to make sure their prices are the same across vendors where there are fixed price laws for books.
Kobo, for those who are interested, expects US users to provide an EU price that INCLUDES VAT. They also only have one price for the EU, but because it includes VAT, you can, effectively, provide the same VAT-inclusive price everywhere and remain in compliance with German and French laws, assuming you (alas) set the German and French prices to the same VAT-inclusive price everywhere else. Not very fair to the French, where VAT is so much lower, but it’s that or nothing.
Because Nook does not include VAT and also only has one price for the entire EU, there is no way to guarantee the price will be the same where it needs to be.
Kind of Snide Aside
I always wondered why Nook is inflexible about how you sell in countries outside the US. I thought it was peculiar that they said “because of the volume” it could take several weeks for a book to appear on the UK or EU sites. Today, the answer finally kicked me in the shins.
The only reason volume would be an issue for populating a website is if they’re doing it mostly by hand. The beauty of a database driven website is that once you have the webpage talking to the database (waving hands and leaving out the bits about horrific SQL queries) there is little difference between putting one record on a page or 1,000,000,000 records. And even if we’re talking about terrible query performance, the time to render even a million records is minutes and in no possible case is it weeks. The only thing that takes weeks in this scenario is the person you’re paying to put the records into excel. Or worse, the person who is entering the data by hand into the servers located in the EU.
Even Longer Explanation
Basically, if you’re selling books, the laws about how to comply with the taxing and pricing authorities in the European Union just got a lot more complicated. For those who are thinking they’ll just wait for the EU tax authorities to come knocking, I will say that you have misunderstood what could happen. If you are selling your books to the EU via Amazon and the like, you are selling to the EU because those vendors have a presence in the EU. If your book at these vendors is priced such that you jeopardize their compliance with EU laws, they will likely have to remove your book from those countries. So, no, Germany will not collect a euro of VAT from you. But your books are likely to be yanked from all the German vendors so, yes, no VAT paid to Germany, but no one in Germany is buying your books.
If you are selling books from your website and you sell to residents of the EU without remitting the appropriate VAT to their country of residence, then you will have some exposure there. Probably you could get away with it, but that does not make it ethical to do so. I have no idea what the IRS might say during an audit when you have income from the EU and can’t prove you don’t have to pay State tax on it, perhaps, or maybe, (total speculation here) the IRS would say something like, Hmm. The US has a treaty with Germany in which we agree not to screw each other over taxes. I dunno. I think I don’t want to find out.
Back to the Even Longer Explanation
VAT varies across countries in the EU. Further, in some EU countries, books must be the same price at all places in that country. Thus, if you are selling a book in Germany, that book must be the same price everywhere it’s on sale in Germany. For DIY authors, that means if a book is Euro 2.99 at Amazon.de, it must also be 2.99 at the German iBooks, the German Google, the German Nook, the German Kobo, etc. The same is true in France: same price in France across all French venues.
In the EU, the price shown to purchasers includes VAT.
Now, in Germany, VAT is 19%. Thus, if a book is priced at Euro 2.99 in Germany, after the sale is made .48 goes to the German government, leaving the remainder of 2.51 to be split between the vendor and author. As an author, I care about the part of that 2.99 that does not include VAT because that’s the amount used to calculate my royalty.
In France, VAT is 5.5%. Thus, for a book priced at Euro 2.99, in France, after the sale is made .16 goes to the French government leaving the remainder of 2.83 to be split between the vendor and author.
At Nook, where I am providing ONE VAT exclusive price for the entire EU, that price must have the appropriate VAT added to it, and that VAT rate varies. Suppose I say, OK, my book is $2.99 (American). Google-fu says that’s Euro 2.48. A quick test at Nook gave Euro 2.47. Using 2.47:
Add 19% VAT for Germany and the price is 2.94
Add 5.5 VAT for France and the price is 2.61
Those are stupid prices to show consumers, but they are also prices I cannot guarantee will match the VAT inclusive prices I must give at EVERY OTHER VENDOR.
iBooks rounds up or down to .99 prices. I will NEVER be able to match Nook to Apple. Not ever except by total serendipity.
At Kobo, I give a single VAT INCLUSIVE price. So… which one do I pick at Kobo? iBooks Germany 2.99 or Nook Germany 2.94?
I could change the Nook EU price to 2.51 to give me a Nook Germany price of 2.99 and match Apple, Kobo, Amazon, and Google to that.
But then the French price at Nook becomes 2.65, which at Apple will be rounded up to 2.99 and …. boom. Not in compliance with French law. This is true as long as I have books on sale at Nook EU.
And that is why I no longer have books on sale at Nook EU. This is complicated enough as it is. Heck, I’m not even confident yet that I have managed to price everything as required, because I will tell you, iBooks did some crazy ass shit with prices that scares me, and Amazon’s VAT adjustment resulted in two of my US prices being raised. That’s not supposed to happen. But I know it did because a couple months ago I used Amazon’s pricing tool to reset some prices, which I logged so I could keep track, and also conformed at other vendors where Amazon recommended a price decrease (because I didn’t want to gouge others) and today, two of those Amazon books were back to the higher US price and therefore MORE than the price at other vendors.