General Interest

International Authors - code drones, scribe slaves and pariahs!

Just completed my second book, 240 pages.  My first, 160 pages, was excellent quality, matching anything that could be found in any bookstore anywhere in the world. Fantastic job, fellows.

But you can’t buy it, I won’t let you! 

.I have learned  (by dull experience) that until Blurb.com can work out a means to remit to a foreign author a royalty for the money they are earning by selling these books,  all that occurs is that  international author are giving them profit per unit of sale – for nothing in return.  Yes, that’s right. We can’t even mark up our books by a dollar, because Blurb.com feeels that it can’t allow foreign authors to profit, lest the fiscal fiends (a.k.a. tax authorities) should want their cut. 

Whatever happened to the business model, pre these big-brother days, of placing the responsibility upon the customer?  Very few of us will sell any more than a small number of books, and we can surely cope with the income tax implications on our (foreign) shores.

When Blurb.com finally get their act together, and recognize that there is a huge market "out there",  I’ll consider releasing my books on "general release."  If Blurb.com was a traded company, the management would be fired for so totally ignoring the profit potential generated by the development of foreign authorship sales. If it was a traded company, I’d expect an earnings sky-rocket.  But until now, the rocket is not on the launch-pad. 

Replytopic_b_normal
Posted by
EXO
Dec 23, 2007 5:41pm PDT
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EXO
 

I know what you mean, but management has said that they are looking to resolve all of this before the end of Q1…..I look forward to selling through Blurb as well….K.

Posted by
cantudoit2
Dec 24, 2007 10:44am PDT
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cantudoit2
 

I wouldn’t blame Blurb—I’d blame the European Union’s VAT system. Blurb doesn’t get the choice to decide to let you deal with the taxes. European law requires them to collect VAT. And setting up VAT for a U.S. based vendor of goods is not a trivial matter, involving international legal and accounting advice, not to mention fairly extensive programming that is all VAT specific.

Please see Wikipedia: http://en.wikipedia.org/wiki/VAT—specifically the section on Directive 2002/38/EC.

Posted by
MtnViewMark
Dec 24, 2007 11:01pm PDT
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MtnViewMark
 

I am new to Blurb.  Does it mean that Blurb won’t pay me anything for my published work, if I live in India?

 

Posted by
ld_sharma
Dec 25, 2007 9:48am PDT
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ld_sharma
 

If it’s all about the European VAT System, then what about us Australian authors? What about Authors from India, South Africa, Philippines etc?

Sorry, the preoccupation with European VAT is a dog which just don’t hunt. 

Posted by
EXO
Dec 28, 2007 6:41pm PDT
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EXO
 

Actually, all of those countries (Australia, India, South Africa and Philippines) have VAT systems. Which means that to support authors in those countries selling at a profit, Blurb would need to get legal and accounting advice for each system, and possibly create custom server software to handle them.

One of the reasons that governments choose VAT systems is that it puts more of the burden of tax collection on business. The business have to do more work managing the collection and accounting of taxes than they do in other tax systems. When VAT is extended to apply to internet based commerce, then that burden gets distributed to foreign businesses such as Blurb.

This approach makes it very difficult for a U.S. based business to effectively support a global user base. It is hard enough following the rules of one’s own country’s tax system. Trying to comply with dozens of others’ is nearly impossible for a small company.

[Disclaimer: I don’t work for Blurb and don’t know any of the details in their quest to support authors in other countries. However, I do work at an internet based business with a substantial global user base and we’ve had to face these difficult issues.]

Posted by
MtnViewMark
Dec 28, 2007 10:20pm PDT
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MtnViewMark
 

I’m pretty sure that the european VAT system is irrelevant to a US company. I believe there’s some kind of tax treaty in place. If there wasn’t then there are a great many companies starting with Google and Amazon that wouldn’t be able to pay royalties to international authors like they do.

I have had a book ready to roll out with Blurb since August last year. I’m desperately keen to publish it but unwilling to do so without getting paid. And I’m getting a bit peeved about how long this is taking to sort out. 

Can someone from Blurb please tell us if this is EVER going to happen and if so an approximate realistic idea of when? I no longer want to go on holding my breath here.

John

Posted by
floyduk
Jan 3, 2008 6:13pm PDT
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floyduk
 

Alas, no, there isn’t any such treaty. And yes, it affects a great many U.S. companies.

To quote from the EU’s own web site:

“for specified electronically delivered services, when supplied by a non-EU operator to an EU customer, the place of taxation is within the EU and accordingly they are subject to VAT;”
...
“Non-EU businesses are able to register with a tax authority in a Member State of their choosing. They are required to charge VAT to non-business customers in the EU according to the standard tax rate in the Member State where the customer lives.”

( see http://europa.eu/scadplus/leg/en/lvb/l31044.htm )

There are some other good bits on that page, including the rationale for why they do this: Without this tax, it “put EU business at a competitive disadvantage”.

Posted by
MtnViewMark
Jan 4, 2008 8:18am PDT
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MtnViewMark
 

I’m confused. It seems like what you’re talking about is the need for US companies to charge EU VAT on sales to EU customers. That might or might not be true but it’s not what we’re talking about here. We’re talking about payments to the authors, not charges to the book purchaser.

But regarding that EU VAT on purchases from USA companies thing – does that mean all those american companies selling to the EU without adding any sales tax are breaking EU law? USA law? And who is going to do anything about it?

John

Posted by
floyduk
Jan 4, 2008 10:42am PDT
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floyduk
 

I’m not sure about the rest of the EU but in the UK Books are exempt from VAT.

But the general argument in the above messages is fallacious for EU users. If it was a real issue Blurb would not be able to ship books to the EU at all, VAT is levied on the price of the product not on the profit on a product.

I have ordered from many US (and other countries), if the UK Customs & Excise department decides to they can surcharge ME (NOT BLURB) when the goods arrive in the country. The Post Office, or the delivery company (e.g. UPS), is then made responsible for collecting the customs duty and VAT from the recipient before they release the book.

I use the US Amazon frequently as many photography books are released in the US months before the UK, Amazon are quite happy to ship them to me and leave me to deal with the TAX authorities.

As a freelance (IT) consultant I have worked in the US, Australia, many EU countries, Norway my clients simply use the banking system to transfer my profits (what I charged them) to my account in the UK. It is up to me to declare….. or not :-).... that income to the UK tax authorities and to handle the legal issues if I decide not to.

All Blurb has to do is make sure the delivery label includes the declaration of what the product is and the value (the marked up price) of the book.

 It may well work differently in the US, but I don’t live in the USofA, I live in the UK.

........Tony

Posted by
tfrankland
Jan 4, 2008 11:00am PDT
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tfrankland
 

Well, I suggest some of International authors to buy a couple of books. You can buy your own books at “wholesale” price, and you can sell your books at higher mark-up prices, so you can make a profit on your own that way.

Perhaps that you want to consider your own web site with simple PayPal account, where you can sell your books online. There are options, and you are encouraged to do some research about selling your books through your own website’s online store. Since international law varies from country A to country B and Z, please kindly refer to your nation government’s law, and local law and regulation for that matter.

It is only a thought.

Posted by
brianbonitz
Jan 5, 2008 3:59pm PDT
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brianbonitz
 

Yes I’ve heard this argument before. I *could* buy books wholesale and then do the sales, order processing and delivery myself. But that’s a lot of work and expense. I want to spend my time producing my show – not selling my show merchandise. I want to pay Blurb to do that for me.

Tony’s points above are well made but once again we seem to be getting stuck on this notion that the problem is with charging VAT on books purchased and posted to the EU. What Blurb are saying they can’t do is pay *royalties* to EU authors. That wouldn’t be a VAT issue at all. It would be an income tax collection issue. I simply don’t believe that a US company can possibly be held responsible for collecting UK income tax. How would that tax be delivered back to the UK chancellor?

John

Posted by
floyduk
Jan 6, 2008 3:37pm PDT
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floyduk
 

Hi John,

As for income tax collection issue, it is a little different issue. So are you referring it to sales tax issue, no?

If we look at, as an example, Apple online store and physical retail Apple stores, they charge their customers along their purchased items with sales tax. So it depends on certain situation, depends on companies do the business in the states as opposed to nationwide in the US or abroad.

You and I probably agree on the term of tax issue is very complicated. I really think that is what holding Blurb back somewhat, and I believe that Blurb want to comply with countries once the foreign government’s commerce and tax revenue department/branch approve Blurb’s application and license of doing the business in that country. It takes LOT of time, effort and money.

As to why didn’t Blurb do this or that, I do not know for the answer. I would think that it takes some time to make it all possible for some foreign countries that Blurb do business with.

Remember that Blurb is relatively new company and is building and perhaps expanding rather conservative, perhaps ultra-conservative in some cases.

If you look at corporate finance history, as an example, at Northwest Airlines back in 1990s, at THAT time, Northwest Airlines’ parent company called NWAC Inc was the only international/US domestic carrier that posted over straight, consecutive 40+ (I believe it was 42 or 43) years of profitability. Northwest Airlines’ executives have this reputation for being ultra-conservative when it comes to expenses in the line of revenue approach, and they REALLY pay attention to every cent and dollars of doing business. They usually re-allocate equipments (types of aircrafts) to accommodate more profitable routes and reduce service or frequency of flight schedule to less profitable routes, or switch to smaller regional jets from mainline jets. NW are still doing those conservative decision-making approach and they make decision VERY fast than its counterparts companies.

However, this analogy between Northwest Airlines and Blurb Inc have nothing to do with each other, nor airline business or publishing business. But I can tell you that cost of doing business is expensive.

Approximately 80 percent of start-up companies in US usually fail less than a year or two. Only approximately 20 percent have survived. It is all about doing the business, managing corporate finance and management’s decision in dealing with whatever issues.

I would think that publishing startup companies are dealing with expensive printing equipments, software and manpower to develop goods and service. It comes down to the bottom of business – cost of doing business. It costs money and capital investment.

In the case of Blurb, I would think it is very unique situation for Blurb to expand oversea in such young, new startup company. Not bad idea for new start-up company.

That is all I can say. I am sorry that you are frustrated or disappointed. However, I would encourage you to submit feedback or suggestion and share your concern, thought or idea with Blurb. I am certainly sure that Blurb people would be very happy to hear some feedback or suggestion, or some ideas from people like you or myself or other Blurb authors/customers.

Cheers, Brian

Posted by
brianbonitz
Jan 6, 2008 4:27pm PDT
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brianbonitz
 

Quick additional note to NW executives’ frequently re-allocation of equipments, they do that EVERY month, as opposed to other, most airline companies stick with quarterly actions of doing business decision.

Along with publishing companies dealing with expensive equipments, so are with airline companies dealing with billions of dollars of capital investment into new equipments, technology, and all, you can name it.

Startup companies’ founders and owners know that very well, they take lot of significant risk to make it work.

Posted by
brianbonitz
Jan 6, 2008 4:33pm PDT
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brianbonitz
 

Here is what I found in other forum topic under “International sale” in General Interest forums.

The message quoted by Blurb staff norcaljhawk>

[“This is the key statement:
“I don’t know about other countries…”
And this is the very area I am addressing. Unfortunately there is an existing precedent where US companies are requiring tax information for royalty payments outside the US. Do know that we are actively reviewing our options with both legal council and our accounting firm in the EU.]

Forum’s specific URL address cited:
http://forums.blurb.com/forums/3/topics/307

Posted by
brianbonitz
Jan 6, 2008 4:52pm PDT
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brianbonitz
 

First off – let’s not assume I know nothing about business. I’ve been a director in 3 UK Ltd companies and a managing director of one of them. My current company does a little business overseas but we don’t pay anyone royalties. I do understand sales tax fairly well, though. And this issue has nothing to do with sales tax. Your paragraph about Apple stores shows that you’re still talking about sales tax so let’s be really clear and define some terms.

Sales tax is a tax added to the cost of a sale when someone buys a product or service. In europe we call it VAT (value added tax) but it’s basically the same thing as american sales tax.

Income tax – I’m guessing most everyone who has a job knows what this is. ;-) It’s a tax on your income. ALL forms of income are taxed here in the UK and, I suspect, in most countries. That includes salary from a full time job, income from side-businesses, rent payments,  interest payments and so on.

Import duty – a tax levied on goods purchased overseas and imported into the country of the person buying the goods. 

Ok we’ve got those definitions out of the way. Let’s look at the actual thing I’m asking Blurb to do. I have a book that I’d like to publish on Blurb. I would like to get paid a royalty for the sale of each of my books. Let’s call me John and let’s call Blurb Blurb. Then let’s invent a customer who wants to buy my book. Let’s call him Fred.

Step 1: Fred comes to Blurb to buy John’s book. Blurb charges Fred for the book and adds sales tax.

Step 2: Blurb sends the book to Fred. If Fred is overseas from Blurb his purchase may trigger an import duty as it arrives in the country. If it does then Fred is resposible for paying it, not Blurb. 

Step 3: Blurb sends John a royalty payment.

Now for the important bit: 

Step 1 is a sale and attracts sales tax. The sales tax is between Blurb and Fred and their two governments. It has nothing at all to do with John.

Step 2 is not a sale and does not attract sales tax. Any import duty is Fred’s responsibilty. Likely the goods will not be delivered to Fred until he pays the duty.

Step 3 is not a sale and does not attrract sales tax. It is a royalty payment and is essentially income. John would have to delcare the income on his tax return and pay income tax on that royalty payment.

I simply do not believe  that an american company can be held responsible for collecting income tax for a UK citizen. We have a PAYE (pay as you earn) scheme for employers to do exactly that here in the UK but an american company could not join that scheme and in any case income tax is only collected under PAYE as a main salaried employment – not on side businesses.

John

Posted by
floyduk
Jan 6, 2008 5:09pm PDT
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floyduk
 

I totally agree with John. I live in The Netherlands and here it is the responsibility for the person earing the money (in John’s example: "John") to declare any income to the tax-authoroties. Blurb will have nothing to do with that and is also not responsible when John decides to defraud his tax-collector by keeping silent about his brilliant booksales.

So also to Dutch law I see no  reason for Blurb not to set up a sellers-program for the EU. (I can’t imagine, Europe being the EU that in our neighbouring countries it will be any different)

and the situation now is even so unequal that Blurb doesn’t even tell their overseas authors if there have been any sales of their books at all (for those who decide to forego the profits in favor of the feeling that they have a book out there, like me)

Frances 

Posted by
fschling
Jan 19, 2008 5:58am PDT
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fschling
 

Honest to God!  What a lot of blather.  From what I can see none of you is either a tax accountant or tax attorney.  The issue is not about collecting taxes (VAT or income), it’s about reporting.  In the US if you pay anyone pretty much anything it is supposed to be reported to the IRS.  If it’s casual imployment the rules are oftem ignored and the business is refered to as underground.  Happens a lot, but it’s not legal.  If you are a legit business you are required to submit a 1099 form for any payment made to an employee.  Also reporting is required for payments to independent contractors.  Banks are required to report interest payments to customers to the IRS.  Brokerage firms are required to report monies paid out to customers to the IRS, etc., etc.  Otherwise the government has no way of knowing who’s earning what, and has no way to tax them.

Countries in Europe have, I’m sure similar requirements.  Probably all somewhat different.  Conforming to those reporting requirements is undoubtedly what Blurb is working on.  Also keep in mind that regardless of what other countries require, US authorities are going to require Blurb to account for any money they pay out.  It won’t be enough to say "oh we paid $x to so and so’s paypal account", they require orderly, auditable reporting schemes.  And for Blurb, more than just the reporting, they will need to code all this into their backend fullment software … I’m sure not a trivial task, in and of itself.

Blurb is a small start-up with, I’m sure, limited resources.  It takes time and money to get this stuff together.  They have said they’re working on it, and I suspect they want this done even more than all of you ( if only shut you guys up) as it will mean more revenue for them.  Painfull as it may be, give them a break and let them get it responsibly together.

 

 

Posted by
dagree
Jan 19, 2008 10:24am PDT
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dagree
 

I am not allowing my books into open sale until Blurb gets their act together. Other publishers have done it.  It isn’t blather, it’s an important factor for international authors that they not have to invest in inventories of books, double pay shipping charges etc. Walk a mile in our shoes, eh?

Posted by
EXO
Jan 26, 2008 7:24am PDT
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EXO
 

That at least was a cogent and plausable explanation of what makes this difficult for blurb. Thanks for that.

What it really comes down to, though, is that this is something Blurb’s competitors can do.  As long as Blurb wants to play in the same paddling pool as big-boy Lulu they’re going to have to play by the big boy rules.

To put a nice spin on this – I want to give Blurb my business because they have a superior product. But right now I can’t and both Blurb and I are missing out on making some money as a result.

Posted by
floyduk
Feb 20, 2008 6:35am PDT
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floyduk