iTunes Content May Actually Cost Less After U.K. Tax Change

iTunes Content May Actually Cost Less After U.K. Tax Change

Instead, Apple is serving its digital content to U.K. customers from Ireland, where the VAT rate is 23%.

The Cupertino company confirms this in the “Payment & VAT” help section on its website, which reads: “The VAT rate for Apple customers who purchase Electronic Software Downloads or other Apple products which are classified as services under EU VAT law will be 23% Irish VAT.”

“This is because the place of supply of these products under EU VAT law is Ireland as the country from where Apple Distribution International makes these supplies.”

With that being the case, customers in the U.K. will actually pay less VAT under the new rules, meaning iTunes and App Store prices should fall a little.

In reality, Apple is likely to leave them as they are and pocket the difference — but at least prices won’t be going up like you may have been led to believe.

Potentially good news! Nothing can happen until 2015 anyway but it does sound like the early reports may have jumped the gun.