From: Martin Beckett
To: ask_tim@oreilly.com
Subject: CD's with Books in the UK
Tim,
I would like to comment on including CDs with books.
One of the advantages of O'Reilly books is that they don't automatically come with CDs. In the UK books with CDs are considered software and so attract a 17.5% sales tax which otherwise doesn't apply to books. In addition many university libraries will not accept books containing software because of difficulties shelving them and concerns about the licensing agreements.
Martin Beckett
Martin,
Graham Cameron, the Managing Director of our new UK company had this to say:
this is a common misconception by the public.
When a CD is packaged with a book, VAT is only applied to 10% of the list price and not the full list price.
eg if a book (with a CD in the back) has a list price of £10.00 then VAT (17.5%) is applied only to £1.00 making the whole package £10.17.
The only products on the O'Reilly list which attract full VAT are the pure software products.
This particular VAT ruling is only effective in the UK - all the other European countries have different rulings eg in Denmark they apply 25% VAT to books! So much for European harmony!
There endeth the tax lesson!
Best, Graham.
--Tim
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