Shopping online in Europe is expensive!

Europe is expensive, especially when compared to the states. This goes for physical purchases made online as well as downloadable purchases like games and music. Following years of frustration and claims of “always being ripped off by the fucking EU,” I finally decided to do a bit of research to determine why.

I found the same product (Corsair 120GB Solid State Drive) available for sale on several Amazon sites. After shipping and taxes amazon.com charged ($235.57), amazon.co.uk ($301.42) and amazon.de ($295.62). Why the ~30% increase in price in the EU? Well, it turns out that online sales are (somewhat amazingly) still subsidized in the US. US stores only have to charge sales tax when shipping in state, when shipping out of state no sales tax is charged. On the other hand, all European online stores are required to charge VAT (currently 20%) for all purchases, VAT is the European equivalent of US sales tax. When you add VAT onto the amazon.com order total you end up with $282.57, just slightly less expensive than amazon.de and amazon.co.uk. I’m assuming that the additional price difference has to do with fluctuations in the currency market and the weak dollar.

So that’s it I guess. The difference in price appears to be mostly due to US e-commerce subsidies. Although, even if the US charged sales tax for online purchases the current mean rate is 10% (compared to 20% in the EU), so things would still be cheaper. I guess the EU isn’t ripping me off in the end, the US government is simply eating the sales tax to encourage e-commerce. All said, considering that European taxes provide universal education and healthcare and all we get in the US is constant war, I guess I shouldn’t complain so much about paying a bit extra on this side of the pond.

Here’s the raw numbers from Amazon:

Amazon.com
Items: $229.99
Shipping & Handling (to USA): $5.58
Total Before Tax: $235.57
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Order Total: $235.57

If VAT were charged (20% / $47) then the total would be $282. If the mean US sales tax were added (10% / $23) then the total would be $259.

Amazon.co.uk
Items: GBP 150.98
Postage & Packing (To Spain): GBP 0.00
Total before VAT: GBP 150.98
VAT: GBP 27.18
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Order Total: GBP 178.16
Payment Total: USD 301.42**

Amazon.de
Artikel: EUR 161,22
Verpackung & Versand (To Spain): EUR 6,05
Gesamtsumme ohne MwSt: EUR 167,27
MwSt (VAT): EUR 30,11
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Gesamtbetrag: EUR 197,38
Rechnungssumme: USD 295.62