Blimey. Apple customers in the UK may soon see price increases on App Store and iTunes purchases thanks to new laws set to take effect next year. As noted by The Guardian Sunday, the new UK budget looks to close loopholes used by online retailers to avoid taxes in the state.
More than Apple customers will be affected by the changes to the tax laws. Many online companies currently avoid the UK’s 20 percent VAT by locating their servers in countries such as Luxembourg, where the tax rate is significantly lower (between 3 and 15 percent depending on the good or service). With the new UK budget, however, goods and services will be taxed based upon the location of the consumer, leading to higher costs for UK shoppers.
As announced at budget 2013, the government will legislate to change the rules for the taxation of intra-EU business to consumer supplies of telecommunications, broadcasting and e-services. From 1 January 2015 these services will be taxed in the member state in which the consumer is located, ensuring these are taxed fairly and helping to protect revenue.
Unless modified, the changes to digital download VAT rates will take effect on January 1, 2015.
