Germany increases tax on flash storage by roughly 2,000%

By on June 7, 2012, 8:30 AM

Germans can expect to pay a hefty premium on USB drives and memory cares as the nation raises taxes on flash storage by roughly 2,000%, according to Heise Online (translated). ZPÜ, the office tasked with setting levies against blank media, has reportedly increased the taxes without offering an official explanation. However, Heise notes that ZPÜ is chummy with GEMA, an RIAA-like organization that represents tens of thousands of artists, suggesting that ZPÜ isn't exactly out to protect consumers.

The tax was introduced as a method of compensating the recording industry for media copied across readily available cassettes and discs. Considering the fact that it treats every shopper like a pirate, this approach is unfair, particularly so when it comes to flash storage. At one time, you might have been able to make the argument that blank audio cassettes were likely to be used as a means of copying music -- I certainly did it -- but USB drives and memory cards have infinitely more uses in modern everyday life.

If we understand right, Germans currently pay an €0.08 tax (roughly $0.10) on portable flash storage, in addition a value added tax (VAT) of 7%. Starting July 1, consumers can expect to shell out €0.91 (around $1.14) on USB sticks and memory cards with less than 4GB of storage and €1.95 (about $2.44) on units over 4GB. The increase is expected to spark a "year-long" dispute between ZPÜ and memory manufacturers, with companies including Transcend and Kingston pushing for the tax to be reversed.

Bitkom, an organization representing over a thousand German technology companies, has pledged to fight the increase and believes the previous rate of €0.08 per unit was reasonable. Memory makers are concerned the hike will distort true market values and push Germans to purchase memory from neighboring European countries. Additionally, manufacturers will have to save cash in case the tax is reverse in the future, which could prompt a class action lawsuit requiring companies to issue refunds.




User Comments: 23

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Guest said:

That's David Orcus!

Guest said:

Taxation without representation - pass a tax unopposed and then let the taxed defend themselves afterward, which is quite the uphill battle.

treeski treeski said:

Wow. This is one of the most rediculous things I've heard in a while.

Mantrhax Mantrhax said:

Bullshit...Big companies are trying to dominate the whole world... its time to fight back !

Renrew Renrew said:

Since the European countries adjacent to Germany are all within a few hours driving range, no German in his right mind, will pay these ludicrous taxes.

I see a new Business model forming for the Balkan countries.

Raswan Raswan said:

Since the European countries adjacent to Germany are all within a few hours driving range, no German in his right mind, will pay these ludicrous taxes.

I see a new Business model forming for the Balkan countries.

No doubt that it's ridiculous, but you're gonna drive 2 hours to save a dollar tax on a USB drive? Doubt it.

MilwaukeeMike said:

Bullshit...Big companies are trying to dominate the whole world... its time to fight back !

Then don't buy their stuff. The problem is, it's easy to talk big, but much harder to put down that iPhone. Of course, we could stop stealing music and movies, but it's much easier to just complain.

No doubt that it's ridiculous, but you're gonna drive 2 hours to save a dollar tax on a USB drive? Doubt it.

No kidding... I'll save my energy to complain about something that matters. Had this headline read 'increases tax by 2 bucks' no one would care, but 2000% LET's RIOT

Guest said:

Actually the "Companies" are against this tax.

nazartp said:

Problem is not in "complaining", but in the inequitable effect of the tax. It actually achieves the exact opposite of the desired effect. Simply because it blankets the pirates and honest consumers alike, it increases the willingness of the average consumer to steal - he/she already paid for it!

Cota Cota said:

Nothing to see here, just artists greed move on.

Ranger12 Ranger12 said:

How about purchasing them online from companies outside of Germany? Seems like it might be a way to circumvent this craziness.

lipe123 said:

Nothing to see here, just artists greed move on.

Not even close, the artists will never see a cent of that money. It's the music distributors thats the giant assholes here. Just because they where the only ones in the 60-90's that could do it they got REALLY comfy and REALLY rich. Never bothered to update their business model.

Now any joe blow can record stuff in his/her garage and sell it on iTunes under their own name almost. The old business model is dying and now they revert to these underhaded BS tactics to milk everyone.

Matt Tuchfarber said:

@Cota Please don't call this artists' greed. The artists make no money off of this. It's all for the recording business to raise their bottom line. This money wouldn't help pay off the money that the recording artists owe the labels.

Guest said:

yes let's invent new taxes to save a failing business model.

m4a4 m4a4 said:

Seems like the govt is tight on cash and needs the ever popular flash storage to help boost their reserves..... eh, w/e

Tygerstrike said:

LMFAO!! All I see here is, boohoo things are going to cost more for german ppl. They alreday pay around 21% in taxes for any product in their own country. The German Govt. lumping both pirates and consumers together makes perfect sense. If you cant stop the piracy, make everyone pay a high price for the media device. Much like the US did raising the costs of Ammunition for guns. Cant stop the crazy ppl from shooting each other, and since you cant tell who the crazy ppl are, everyone pays. Thankfully they keep comming out with higher and higher gig memory cards and flash drives.

ikesmasher said:

I saw this, and I was like, who the hell thought this was a good idea?

Jibberish18 said:

Bullshit...Big companies are trying to dominate the whole world... its time to fight back !

Then don't buy their stuff. The problem is, it's easy to talk big, but much harder to put down that iPhone. Of course, we could stop stealing music and movies, but it's much easier to just complain.

No doubt that it's ridiculous, but you're gonna drive 2 hours to save a dollar tax on a USB drive? Doubt it.

No kidding... I'll save my energy to complain about something that matters. Had this headline read 'increases tax by 2 bucks' no one would care, but 2000% LET's RIOT

Think about it. If a tax like this is okay to pass then what else could they get away with? It's not about the fact that it's just an extra $1 you're paying. It's about the fact that once they see that the people won't complain they'll just find other things to tax. And the tax isn't even going towards something that will benefit the people of Germany or even the artists (if what the article claims is true). So go ahead and complain about more important matters.

BTW, don't blame artists. They work for their pay just like you and I.

Guest said:

I thought I was seeing things for a minute there, but this is real??? poor germans, there government is doing stuff as crazy as the American gov.

Guest said:

Just puyrchase from elsewhere and the companys involved will move offshore it is a pretty simple answer to a scheme that is without merit by germany.

Guest said:

I hope you are kidding!!! This is the greed of the recording industry and they will not pay the artists...

TJGeezer said:

Nothing to see here, just artists greed move on.

Bullshit. It's the copyright owners' greed. They are generally NOT the artists. Copyright law has been distorted past recognition since RIAA and other lawyer-run extortion vehicles sensed a threat to their gravy train. Ever more successful music acts are getting away from those people if they're not locked in by contracts, and the midlist artists are going to the Internet as well.

To borrow from @Guest - I hope you were just trolling and not actually blaming the artists and their fans, who are the real victims of corporate greed and cold-eyed lawyers in this entire dispute.

Guest said:

if I was a lawyer I would be hot eyed or end up like david orcus

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