The UK is not the only market to see an increase in the basic price apps. The rest of Europe and Canada also saw prices rise over the weekend. European price rises are largely down to new legislation brought in on January 1st by the EU. The new law is aimed at preventing large companies like Amazon from avoiding paying taxes in member states.
In the past, companies like Apple and Amazon have based themselves in countries with low VAT rates – like Luxembourg, whose VAT rate is 5 per cent – in order to cut the amount of tax they have to pay on sales.
However, the new EU law means that the VAT rate charged is based on where the app is being bought, rather than where is being sold as was the case in the past. The change in the EU law means that Amazon and Google are likely to raise their prices in the near future too
