It seems that the days of Â£0.99 music downloads at Appleâ€™s U.K. iTunes Store may be coming to an end as Britainâ€™s Government is looking to close a tax loophole which allows companies to charge Value Added Tax rates from other countries. Thus, Apple and other companies who deal with digital music sales, could be forced to increase the amount of VAT for music and video sales. Rowena Mason from The Guardian publication has more details about this:
Apple has been selling its iTunes downloads through EU countries like Luxembourg with VAT rates as low as 3 percent. The new law could be effective from 1 January 2015 and Apple would have to align with U.K.â€™s full 20 percent VAT for purchases. Hereâ€™s what the budget document says:
Closing the VAT loophole for Apple and other companies selling digital content will definitely help get more money coming into the government, but in the end, consumers are those who wonâ€™t be too happy about this. The change is estimated to raise government income from taxes on digital sales by as much as Â£300 million ($494 million) per year year.