I'd be interested/grateful for anyone's take on this.
1) Ebook sales are made via Amazon's self-publishing platform (KDP)
2) Amazon handles all sales to the consumer (sales, returns, payments, VAT charges where applicable. They set the terms and conditions of sale). The author does not even know who the consumer (reader) is
3) Amazon pays author (in this case a limited company) a royalty based on sale (approx 70% of sale price)
4) Amazon sells through it's various country-specific stores - ie UK, US, Germany etc
5) A separate royalty payment is made to the author from each of the country-specific stores.
I have a three questions, please:
a) For the purposes of deciding if the limited company (author) should register for VAT, are the royalty payments taken into account - ie are these seen as 'sales'?
I've seen numerous discussions about this. Some suggest that the author is making a B2B sale to Amazon. Others suggest that the royalty payment isn't a 'sale' at all.
b) Assuming that the income from the royalty payments should be taken into account when considering the threshold for VAT, then is it only the income from the UK Amazon store that is relevant or is it the total of all the EU stores or is it the total income.
eg:
Amazon US royalties = £85k
Amazon UK royalties = £10K
Amazon (All EU) royalties = £20K
Amazon total royalties = £115K
Which figure would determine whether the threshold has been reached?
c) Assuming that the company does have to register for VAT, would the royalty payment for sales through UK/EU stores be deemed to have a VAT component.
eg if the royalty payment was £10K would that mean that it was actually a payment of £8333 + VAT?
Additional info: Amazon do not request/require invoices . They simply issue remittance advices for the royalty amounts due.
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