From Amazon's Kindle Direct Pricing instructions:
If you [as a KDP author/publisher] set multiple EURO list prices for your book for different Amazon websites, note that we use the lowest of these EURO list prices for sales to customers in countries served by more than one Amazon website, to provide consistency across those Amazon websites. For example, customers in Switzerland and Luxembourg can buy Kindle books on both our Amazon.de and Amazon.fr websites. If you provide us different EURO list prices for a book for our Amazon.de Kindle Store and our Amazon.fr Kindle Store, when we sell your book to customers in Switzerland and Luxembourg, we will use the lower of the two list prices for sales to those customers on both Amazon.de and Amazon.fr.
Switzerland has no VAT, Luxembourg has 3% on ebooks. Germany's is 19%, and France's is 5.5%.
If an author/publisher treats the VAT the way it's supposed to be treated, the price for what is now as $2.99 book on Amazon.com would be (approximately) 2.90€ base list price. That LIST price should prevail in all EU countries, regardless of VAT. Buyers in each country should be able to go to whatever Amazon marketplace they want and, based on their location rather than the marketplace website, see the appropriate price for their country.
To buy an ebook on Amazon, you must have an account. That account must have your credit card or other payment information (which identifies your country) and your device registration (which identifies your country). There should be no reason why Amazon can't comply with EU regulations that require the RETAIL price to be shown as VAT-inclusive.
If I list my book on Amazon.com at $2.99, Amazon converts that price to the appropriate currency and amount for Brazil, Australia, Japan, Mexico, India, and Canada. Amazon can and will convert that price to a single price for all the EU marketplaces: €2.99.
But wait, France has only 5.5% VAT, Luxembourg has 3%, Italy only 4% (which has not yet been programmed into the Amazon KDP pricing system). So shouldn't the prices paid by buyers in France, Luxembourg, and Italy be substantially less than in Spain, Denmark, and Germany, as well as all the other countries where VAT on ebooks is much higher?
Not according to Amazon!
And any author who tries to match their prices to reflect the different VAT rates will be screwed, because if a buyer from a country with a higher VAT rate buys from a marketplace website with a lower VAT-included price -- Amazon.fr, or Amazon.it -- the seller will still be charged the higher VAT rate.
This is all terribly confusing, I know.
If I list my book on Amazon.com for $2.99, the equivalent VAT-inclusive price for Amazon.de, Amazon.es, and Amazon.nl would be 3.49€; for Amazon.fr and Amazon.it, that VAT-inclusive price should only be 3.09€.
But as a KDP author, I have no control over who buys from which marketplace. Can a reader in Portugal buy from Amazon.fr and get the lower price? Will Portugal collect their full 23% VAT, even though only 5.5% is included in that price? If so, guess who covers that remaining 17.5%? You can guess it's not Amazon.
Any buyer in the EU who has access to more than one Amazon marketplace will see the lower price. The author/publisher has no control over that. The only way we can protect ourselves is to price our books at the highest potential VAT-inclusive price, screwing our readers in France, Italy, Luxembourg, and Malta.
And Amazon has not even explained how VAT is applied if a buyer from Lithuania or Romania, Greece or Poland buys from Amazon.com, which has no VAT-inclusive prices.
Did the EU pass this legislation without knowing how the various big players would implement it? Probably. Did the EU pass this legislation without knowing how it would affect the millions of small players who would not even be able to implement it? Probably. Did the EU pass this legislation without installing an apparatus to make sure it was implemented fully and fairly? Probably.
I'm only one author, one voice. I don't sell a whole helluva lot of books in the EU. But I think buyers in the EU should be aware that what they're seeing as VAT-inclusive prices from Amazon may not in fact be accurately VAT-inclusive. Some of you will be getting bargains. Some of you will be getting screwed.
It's not my fault.
And Happy New Year.