Dear sirs,
During the course of an investigation into VAT on ebooks for a UK petition it has come to my attention that you owe me money. Apparently you have been overcharging myself and millions of other customers in 25 of the 28 EU countries.
The problem is your VAT charge. The EU states that ebooks are 'a digital delivery service' and that countries in the EU must charge standard VAT rates for this service. I have no problem with that. However you have charged VAT on the full ebook price rather than on the 'digital delivery' part of the ebook. This charge varies from book to book dependant on the file size. To simplify I suggest you apply a standard 10¢ US charge for delivery. In my own country, the UK, this would have a 20% standard VAT rate applied and would cost £0.02 per ebook.
Naturally calculating the refund due to all customers in the EU, (apart from Bulgaria, the Czech Republic and Denmark which do not have a reduced VAT charge for books,) would be a tremendously complex task. Getting a refund from VAT paid to the EU might also prove an overly complex task also. As a result I, and I presume the rest of the EU, am prepared to waive any refund due on the understanding that in future you apply no more than £0.02 for digital delivery VAT on each future ebook purchased.
No doubt the EU will query the reduced VAT payable. However I believe you have the means to meet any necessary challenges in court and in doing so will earn the eternal gratitude of your customers. I suspect that the reduced VAT charge will lead to increased sales of ebooks and increased profits for the authors and yourselves. The move to ebooks, in turn, will do wonders for the environment.
You might also warn the proprietors of e-zines and e-newspapers that a similar reduced VAT charge will apply to them.
Yours faithfully
John Chapman
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