UK iTunes and App Store prices could increase up to 20%

On March 24, 2014


If you are living in the UK then you might want to download as many games as possible before 2015, according to a new law all digital downloads will be forced to pay UK taxes from January 1, 2015.

According to The Guardian the new law will close a loophole that has previously allowed digital downloads to avoid UK taxes. The budget document said:

“As announced at budget 2013, the government will legislate to change the rules for the taxation of intra-EU business to consumer supplies of telecommunications, broadcasting and e-services. From 1 January 2015 these services will be taxed in the member state in which the consumer is located, ensuring these are taxed fairly and helping to protect revenue.”

Currently digital download retailers such as Apple and Amazon are avoiding the UK’s 20% VAT by simply running their operations from other countries where the tax rate is much lower such as Luxembourg where the tax rate is only 3%-15%. According to official estimates the new law could raise an extra £300m for the Treasury.

According to the budget document the new law will affect all digital downloads including music, apps, and e-books.