On January 1, 2015, European Union (EU) tax laws regarding the taxation of electronically supplied services (including digital products such as eBooks) will change. Previously, Value Added Tax (VAT) was applied based on the seller’s country of residence, but as of January 1st, VAT will be applied based on the buyer’s country of establishment.

As a result, starting on January 1st, the list prices that authors enter will include VAT. For books already available through KDP, to make this transition easier, we will make a one-time adjustment to include VAT in list prices. These tax changes affect the list prices that customers may see if they have access to these Kindle stores:

Amazon.co.uk	Amazon.de	Amazon.fr
Amazon.es	Amazon.it*	Amazon.nl

How this changes the way you set list prices after January 1
Before January 1, 2015, to set a list price of £1.99, you had to enter £1.93 to ensure that your list price would be £1.99 once 3% VAT was applied. Now, you can simply enter £1.99, and your list price includes VAT. When we calculate royalties, we will deduct the applicable VAT. You'll be able to see your list price without VAT for the primary country of each marketplace in the pricing page. This makes it possible for you to compare the suggested customer price with the price used to calculate your royalties. When you enter list prices, you'll see the VAT rate for the primary country in each Kindle store.

If you set your EU list prices to automatically calculate from your U.S. list price, your list prices for EU Kindle stores will automatically include VAT. For example, if you set a suggested U.S. list price of $10.00, we convert that price to Euros for the German marketplace. If the exchange rate is 0.8 that day, the Amazon.de list price including VAT will be €8.00. For a sale to a German customer, we would deduct 19% VAT and calculate royalty on a VAT-exclusive list price of €6.72.

*Italy note: Due to country-specific legislation in Italy, a lower VAT rate of 4% will apply to eBooks with ISBNs purchased on the amazon.it Kindle store by customers in Italy. A higher VAT rate of 22% will apply to eBooks without ISBNs. KDP doesn’t require ISBNs for eBooks, but having an ISBN will ensure a lower VAT rate for sales of your eBook to customers in Italy.

Important: Do not use an ISBN from a print edition for your digital edition. If you want to include an ISBN for the digital version of your book, it must be a unique ISBN. You can purchase an ISBN from multiple sources on the Web, including the official ISBN body.