According to a report by the New York Times, the European Union (EU) has decided to increase the Digital Tax that will affect all 28 member countries of the EU. It is being speculated that the increase will directly thump the prices of the digital content ranging from apps and e-books to songs and streaming services.
.Music News: The cost of digital songs may increase from today following EU wide Tax on digital goods.
— Irish Music Feed (@irishmusicfeed) January 1, 2015
The tax experts predict that the increase in digital tax could potentially see the European governments add extra $1 billion to their annual tax revenue. Unlike in the past, the tax on streaming services will now be implemented depending upon the geographical location of the user.
So it remains unclear which country is going to be affected the most with the increase in digital tax. However, it can be confirmed that the prices of digital content are only going to increase now all across the Europe. Many of the tech giants like Apple and Amazon have their headquarters based in Luxembourg which has a Value Added Tax (VAT) of as low as 3% on purchase of e-books.
It is being predicted that Luxembourg will definitely be affected the most by the increase in digital tax and it might lose a great amount of tax revenue. Microsoft has already announced that the prices for Skype are most likely going to be increased in the EU member countries. However, the other services of Microsoft will remain unaffected.