France may tax publications protected by DRM at a higher rate | Hacker News Reader

France may tax publications protected by DRM at a higher rate

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62 pointskoudi27 comments

It's a little more difficult. The proposed legislation is not accepted, and will probably not be: http://translate.google.com/translate?sl=fr&tl=en&u=http%3A%...

This is the same in the Netherlands - VAT on ebooks is 21% ("luxury goods"), normal books are at the 6% rate (same as household goods, foods, etc). Then again, there are more strange classifications in any tax schedule - hamster food is taxed at 21%, rabbit food at 6% (rationale supposedly being rabbits are food too...) and fixing a moped is 21%, but a bike is 6%.

The only problem I have with an analyzed/conditional tax system is the legitimacy of the party in charge of collecting it.

Everyone can nod their heads at taxing vehicles more than bicycles, but if that additional government income goes into tax breaks for certain corporations, or bad social policies (everyone thinks there's one!).

This is why I enjoy flat taxes, so we can focus more on the policies that money provides, rather than siderail that discussion with debates on what those taxes should be.

Obviously we should implement policies that become less expensive with time, but hearing that the Netherlands has a 21% tax rate on moped repair is insane. What does that money directly contribute to? The military? Tax breaks?

With flat sales taxes we can focus directly on policy. Everyone is equal in terms of the percentage of product consumers must pay in taxes, for their product.

I'm sure the government will just happily give tax breaks (this need not be VAT...) or contracts to Big Business in a land of flat taxes, really. I think, on average, that I'm pro non-flat taxes. I'd love to see books NOT be taxed 25% here.

Ah yes - flat sales tax - County XYZ needs a new courthouse so decides to raise sales tax 0.5% within city limits. Not only more complicated, but doesn't seem very fair either. Our taxes are easier than the US system because it's a national tax. My main problem with this tax strategy is that we're "protecting" an industry (book publishers, sellers, etc) that's in decline and probably will stay that way. Taxing ebooks more isn't going to change that - the economics of bits vs printed pages are ofcourse also inverse as these tax rules.

The higher tax is not on all ebooks. It is on DRM'd ebooks in particular. The goal, as far as I can tell from the translated article, is to discourage DRM and "licensing" of content, and encourage DRM free formats.

There's no functional difference between a flat tax with tax credits to booksellers than an equivalent reduction in sales tax. Conditional tax systems are policy.

Everyone is equal in terms of the percentage of product consumers must pay in taxes, for their product.

That's only true in an absolute sense, but not in a relative sense. For a person making minimum wage, each dollar is worth significantly more to that person than someone making 6 figures a year. Moreover, they must ultimately spend more of their income on purchases subject to a sales tax. Thus, the person making minimum wage ends up paying a larger portion of their wealth in taxes, even though it is the person making 6 figures a year (or more) who actually derives greater value (relative and absolute) from the government services funded by those taxes.

A flat tax may be conceptually easy to understand, but it is not economically or morally equitable.

>> Everyone is equal in terms of the percentage of product consumers must pay in taxes, for their product.

> For a person making minimum wage, each dollar is worth significantly more to that person than someone making 6 figures a year.

I believe you're referring to "Marginal Propensity to Consume". But MPC is evaluated with respect to dollar-amounts, not percentages like you imply. A dollar bill is tangible, but a percentage is a ratio, which is abstract. So I feel like you're comparing apples to oranges. I.e. a "flat tax" vs a "flat tax rate".

Under a flat tax rate, minimum wage earners are more sensitive to dollar changes, but also pay less total dollars. Does the former compensate for the latter? Moot. But let's not forget that a flat tax rate would simplify the tax code and more conspicuously expose loopholes.

Elegance and simplicity are often unnecessary and quixotic. But in this case, I think it's actually the progressive tax rate schemes which are unnecessary and quixotic. According to the U.S. Constitution, the purpose of a tax is to enable the U.S. Government to raise the funds necessary to continue operating, not to redistribute wealth. A flat tax rate and a progressive tax rate can accomplish this same goal, but a progressive tax rate is so needlessly arbitrary. Inevitably, a progressive tax rate graph looks more like an S-curve than a J-curve. This is due to the asymptote which arises because the domain is [0, inf) while the range is [0%, 100%].

If you're worried about the ethics of inequality, I think this is more aptly dealt with via tax returns and subsidies. I like to think of this as separating the core from the features.

Yeah, thought that was a great idea and was happy that the law was voted... and two days after, Assembly voted an article cancelling this one, pushed by the government. A big lobbyism at work and a "Europe won't like it and will condemn us" excuse. Our government has no balls.

It is not an excuse, a member can't change the type of VAT applied to products

I know that but that's not really my point. We already changed the type of VAT on this. Bit of context for better understanding (sorry for the length): Point of the law article was to say digital products with DRMs and platform locking aren't really products selling, but renting services instead, and so must be taxed as such. On the other hand, ebooks without DRMs and platform locks are technically books, even if not printed, and so must fall into the book tax class, which has a lower rate. But at the moment, at European Commission level, ebooks are all, DRM or not, considered as services and not eligible to lower tax rates. However, in 2012, France and Luxembourg kind of said "fuck off" to Europe on this point, and both put the VAT rate on ebooks (with and without DRMs) in the book category. For that those countries are under procedure from European Court and must justify enough the case if they don't want to be fined. The debate is on, and may cause a change on this at European level. Our government estimated that the law article making the distinction between DRMised and not DRMised products didn't come at the right time regarding the ongoing debate. And that's what baffles me: the "show up my balls" move had already be done, and this law article was in my opinion a good way to show that we're thinking about what we do, and are not directed by Amazon-leaded lobby on the tax rate choice, because it excluded them of it. And that could have been a good argument over the European Court: we make our choices because of their logical nature, not because of external pressure. The retractation however, shows the opposite.

Having DRM is not the cause of higher VAT, is being an electronic document what makes the VAT being the standard and not the reduced one.

And it is and European categorization, all the countries members of the EU must use that VAT

France is battling Europe's notion of what electronic books are. At the moment, contrary to Europe's advice, France taxes ebooks as books (5.5% in France) while Europes wants ebooks to be taxed as services (20% in France).

This law plays on that distinction, considering that DRMed books are licences hence should be subject to 20% VAT while non DRMed books are indeed books hence subject to low tax.

Right now in the UK, VAT is at 20% on ebooks as it is for any other standard rate item. Physical books and magazines are at 0%. Most people won't be paying this though, as sites like Amazon sell from Luxembourg where VAT on eBooks is 3% (http://www.amazon.co.uk/gp/help/customer/display.html?nodeId...). This can mean that providing a digital product (this recently came up with the Linux Voice IndieGoGo http://www.indiegogo.com/projects/linux-voice/) doesn't knock off as much of the cost as you might expect.

The Luxembourg loophole is expected to be closed by 2015, at which point Luxembourg must increase its VAT in line with those of other EU nations (or alternatively, must alter its VAT system so that the 3% rate is only available for sales to Luxembourg customers). If Luxembourg doesn't change its VAT system, the European Commission will likely carry through on last year's threat to impose fines which would wipe out the tax income Luxembourg currently generates from offering the loophole to companies like Amazon.

http://www.the-digital-reader.com/2013/09/18/new-tax-rules-e...

Add to that the fact that Amazon is subsidizing Kindle device buyers, by asking all the other foreigners to pay an extra $2 for each e-book, making e-books much more expensive for the vast majority of Kindle ebook buyers:

http://davidgaughran.wordpress.com/2011/07/11/amazon-hold-ba...

What happens when one buys an electronic book from outside France ( http://bookscanner.us ) ? Who pays the tax and when?

This is off-topic, but it pains me to see that they shred and recycle the books rather than donating them to schools/libraries.

That would be a copyright violation. The only way to avoid the charge is to destroy the original, so that they can claim no real copy has been made, just a transfer of format.

Ah, that makes sense.

They do shred+recycle, but they can not donate. Its all about copyright laws! :(

The same as buying anything else from a different country. If it is bought from another EU country thencvat is collected by the company. From memory if it is bought from outside the EU/EEA then the customer is supposed to pay the tax when it is imported

But if you travel with the wares, you can bring in €X (around €400) worth of stuff tax-free per trip (there are independent limits for alcohol, tobacco (as long as it is for your own use), and medicines)

See for example http://www.hmrc.gov.uk/customs/arriving/arrivingnoneu.htm (that's for the UK, but AFAIK these rules are standardized across the EU. At least, http://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/b... is very similar)

This law is supposed to take effect after the 2015/1/1 on which day VAT in Europe will be collected according to the country of the buyer while at the moment it is collected according to the country of the seller.

And those taxes will get passed on to the customer, guaranteed.

Yes, the tax is the VAT, which is designed to be only paid by customers. It's roughly analogous to a sales tax in the US

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