EC removes Amazon tax advantage

Kindle 2

Luxembourg and France given one month to increase their rates of VAT on ebooks

LAST UPDATED AT 14:24 ON Thu 25 Oct 2012
The European Commission has said it has given Luxembourg and France one month to increase their rates of VAT on ebooks from 3% and 7% respectively to 15%. Amazon, which is based in Luxembourg, enjoys a big advantage over UK-based retailers which have to charge 20% VAT. Meanwhile David Cameron has said he is “not happy” with the way companies such as Amazon and Starbucks are avoiding paying corporation tax - or paying very little - on billions of UK revenue, The Daily Telegraph reports. “I think the HMRC needs to look at it very carefully,” he told MPs. “We do need to make sure we are encouraging these businesses to invest in our country, as they are, but they should be paying fair taxes as well.” 
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