From the Montreal Gazette:
If Canadians can buy digital books without paying sales taxes, Canadian e-book providers face a slippery slope, a Kobo Inc. executive says.
Daniel Budlovsky, Kobo’s vice-president of finance, was responding to an observation that Quebecers who buy e-books from his company pay about 15 per cent in taxes, while their neighbours, who buy through industry giant Amazon.com Inc., pay no taxes.
“That should be atrociously viewed by the Canadian public,” Budlovsky said from his Toronto office.
“And the Canadian government should look really closely, I think, at how resident taxpaying companies that employ Canadians … have to compete on an unlevel playing field.”
Then there is the different tax treatment within Canada of digital books and paper books, whereby provincial taxes are applied to the former but not to the latter.
. . . .
Strictly speaking, Canadians should pony up federal and provincial sales tax even if they are not billed for them by out-of-country companies, said John Bain, a partner in KPMG’s Indirect Tax Group in Canada.
“There is a mechanism to do it, but I would suggest to you that the compliance would be rather low,” he said.
No kidding. The taxing question of how to deal with digital books is a global issue, Budlovsky and Bain noted.
After signalling its intentions well in advance, France defied the European Union position by slashing its value added tax rate on e-books. That measure took effect Jan. 1.
Luxembourg followed France, also allowing e-books the same preferential rate accorded print books.
Link to the rest at the Montreal Gazette
Passive Guy is sick of all sorts of people who want to increase the price of books – electronic or paper.
Does Kobo Guy think Amazon will pay Canadian sales taxes? Of course not. Amazon’s customers will pay sales taxes, just like they do in those jurisdictions where Amazon has to collect sales taxes and just like they pay VAT where Amazon has to charge that.
PG can’t get on board the “books are too cheap” bandwagon of all the people who can’t wait for Amazon to start charging higher prices.
PG has no problem whatsoever looking for the lowest prices for books or, for that matter, anything else. If no sales taxation results in 15% lower prices, PG thinks that’s fine.
The idea that it’s a patriotic duty to pay as many different taxes as you possibly can doesn’t compute for PG.
If Kobo Guy wants to be patriotic, PG suggests he write a check to the Canadian Finance Ministry. $1,000,000 (Canadian) would help PG feel much better about Kobo Guy’s personal commitment to paying higher taxes.