The Leica 30% offer really detriments non-EU persons

[marknorton]

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HC, that would be one heck of a price increase...

 

If you're in the US, are accustomed to buying grey imports and routinely avoid paying sales tax by buying mail order, the Leica offer is not going to be that attractive, it seems clear.

[herbkell]

Tom, I expect Leica will be looking to simplify the logistics of supplying lenses to a wide variety of shipping destinations and tax regimes. One of the things you can do with companies like DHL is get them to clear the item through customs, pay all taxes and charges due and charge back to the shipper. The customer gets the lens for the price they expect, Leica get an invoice which varies by customer destination for the cost of getting the lens to the customer.

 

I'm looking at a DHL Airway Bill right now and there's a check box: "Destination duties/taxes: Payable by Shipper".

 

We need to be very careful here to make sure that Leica is bearing the cost of both import duties and taxes or just import duties. In Canada they are very different animals and can amount to 8-10 % in import duty and an additional 13- 14% (depending on Province) in Federal and Provincial sales tax. Leica's letter refers to "import turnover tax" a confusing term for most of us but I believe it may only refer to import duties and not sales tax. In short I believe I will still have to add a further 13% {BC} to the amount.

 

Basically counting free shipping but adding foreign exchange fees charged by the credit card company I would save about $150 to $180 over "grey market" on a 21 ASP. ...maybe the cost of the filter!

 

Even calculated against the regular US price the saving is less than 15% - not quite the 30% advertised.

 

Another disappointment!

[scott kirkpatrick]

I suspect this is a case of a top-down gesture that was announced before a complete analysis. In Europe there is a huge beaurocracy in every state that handles VAT. If you are a manufacturer, you pay VAT on your raw materials and subtract that from your VAT collected when you sell the finished product. VAT exceptions on sales are rarely granted and expensive to collect, and this gesture was a Solms gesture, which bypassed all the countries and dealers in between, so it is the factory VAT (at German rates, which are high even for Europe) that has to be finessed. Since the country sales agencies are not getting any of the credit or business involved in this, I can't expect much sympathy for this, unless they are holding stock that they would like to get rid of, further pissing off their dealers...

 

Except for the WATE, which is not even available at most dealers, this is a poor deal for US customers as currently stated. The savings of $16 plus shipping over Popflash's grey market uncoded 75/2 is not enough to make me deal with the paperwork and uncertainties of this offer. And since I don't see how Leica-Camera US would want to get into the middle of the mess, my hopes for an improved offer are slim right now.

 

But I did appreciate the apology contained in the individually signed cover letter.

 

scott

[jaapv]

Undoubtely there are some tricks in the tax department,like formally charging less for the lens and adding the tax to come up with the sum paid by the customer. But I know of at least one country that charges 100% income tax on goods from outside its economic group.I wonder how they would handle that - assuming that anybody there has even bought a M8

[carstenw]

Mark--you speculated in another thread that the high price of the Noctilux might be error, might be price increase. I know there is a US price increase on 1 January, so unfortunately the 3495 euros may be right.

 

Also, but not to Mark--as some have noted here, unless I'm grievously in error, the US does still charge customs duty on cameras and lenses.

 

But gee, for us USAnians that 30% evaporated in a hurry, didn't it? Still, there's enough savings to buy an IR-Cut filter, no?

 

--HC

 

For you, and anyone else in the States, I wouldn't think of this as not giving you the 30% rebate at all, but rather as getting a 30% rebate on every lens, all the time. There are a lot of us out here who really do pay prices similar to these ones, every time.

 

This is not directed at you, Howard, but it is disappointing to hear all these complaints about the rebate. The States has historically been a fantastically cheap country to live in, with respect to prices on consumer articles, but there seems to be no appreciation for this fact among many of its citizens, in spite of the high social cost of the no-VAT decision, such as rich-poor ratios similar to third-world countries, high crime, and little money for social projects.

 

Remember that Leica's costs are very high, due to the quality of materials and elaborate quality assurance (ironic at this time). They are not making tonnes of money on each lens, just a cut. Expecting them to lower the price to ensure the parity of the deal for citizens of a country which in many states charges no VAT--a unique situation--is not reasonable. We do want Leica to survive this debacle.

[scott kirkpatrick]

There are a lot of us out here who really do pay prices similar to these ones, every time.

... it is disappointing to hear all these complaints about the rebate. The States has historically been a fantastically cheap country to live in, with respect to prices on consumer articles, but there seems to be no appreciation for this fact

...

Expecting them to lower the price to ensure the parity of the deal for citizens of a country which in many states charges no VAT--a unique situation--is not reasonable. We do want Leica to survive this debacle.

 

I don't expect to ever know the details of this, but it had seemed reasonable to me that Leica would not need to collect and pay German VAT on lenses delivered outside the EU. US duties on camera equipment are in the range of 2.5%, so Leica may be keeping 16.5% of the price to pay for shipping. (So, if you want to go into the political analysis, they are also benefitting from the low tax rate, helping the rich get richer and the poor get poorer, but I won't say that.)

 

Maybe Leica does have to pay 19%, but their term sheet makes it sound as if they don't. By cutting the savings to 11% of list instead of 30% in one rich country, they have helped their overall business plan, and decreased my interest in the deal.

 

scott

[billh]

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We do better than %19: Norway has a VAT/Sales tax of 25% () added to the bottom line on the invoice after a curreny conversion has been applied. If there are shipping charges listed on the invoice/customs papers that is included in the basis for the tax too. And there will be a handelling fee added as well: anywhere from $13-$40 depending on the shipper used and the value ammount. We want the value on the forms as low as we can...

 

- C

 

19% is staggering - even the 14% in Canada (which I did not realize existed) seems crazy - but 25%? Do you have to pay income tax too, or is this in lieu of an income tax?

[marknorton]

Yes they have to pay income tax, but countries like Norway and Sweden have a very high level of social welfare provision which is completely unknown in the US. Norway is also the third largest oil exporter in the world and is not squandering its oil assets unlike the UK where the attitude is "OK, we've used all that up, what's next?".

 

In terms of GDP, the US has a tax take of 29%, the UK is 39% and countries like Sweden are up to 59%. Which is fine unless you live in a trailer park in Boone, North Carolina.

 

I suppose that if life was intolerable, the Government would be voted out... I've never been to Norway but Sweden is an especially fine place to visit.

[bill vann]

I think it is not reasonable to comapre costs between countries. yes in the US some of my taxes are cheaper.

 

but i pay out of pocket ~ $600 per month for health insurance and it is not inclusive of all costs, i pay a percentage of everything the insurance company pays. my recent spinal surgery cost me over $15,000 after insurance.

 

my employer gives new employees in Germany 6 weeks holiday while giving same staff in the US 2 weeks. rules re employee benefits and treatment vary but are not equal.

 

only 2 small examples but show the complications of comparisons.

 

I've lived in Germany Sweden Norway the UK and am a US citizen currently at home. my experience is that most first world countries are more expensive but in reality much closer all in than many folks think, they look only at very specific examples when doing comparisons.

 

re the discount. i'm not overly pleased with some of the possibilities raised, but until i receive the US letter with the US specifics i will not take a position.

 

assumptions are not really worth much.

 

i will also write a letter back to Mr Lee if i feel the offer is bogus or otherwise unfair.

 

kindly

 

bill

[michael friedberg]

With respect, a lot of this discussion misses the point. We can all talk about whose taxes are higher, whose standards of living are more expensive, exchange rate distortions, who should pay more to Leica, that some countries should be more supportive to Leica, etc. An interesting debate but my point is simply that Leica's letter on the 30% rebate is incorrect in a material way for non-EU recipients. At best, it is an error and at worst it is a lie.

 

The letter states: "In the event of a delivery to a non-EU country the given prices include the respective import turnover tax”. That is fine, but in the U.S. there is no “import turnover tax”. Despite that, and despite the fact that shipping to the US, US duties, handling, etc., don't and can't come close to the 19% VAT, the pricing is the same between EU and non EU purchasers.

 

Of course, Leica can determine its worldwide pricing any way it wants. But if it says "we're offering you a 30% discount" and then says in the fine print "the price includes a charge that doesn't exist" there is a problem. Really. Legally.

[krimple]

Don't you think Leica could spend the time setting up the offers in the actual currency of the countries themselves?

 

Leica, if you're listening--sending us a price list in Euros is like sending an European resident a price list in US Dollars.

 

Another option: they can set the MSRP of a lens in the US, so they could set a rebate amount and give us this refund instead--just register the rebate with a database of cameras at Leica. We'd just have to send in the lens receipt, the camera serial #, and get a check for the difference.

 

Oh, it could have been so easy.

 

I'm still in Voiglanderville, and probably will be until I sell other equipment anyway, so this isn't a reality for me until next year. I'd rather just buy one from a US dealer and get it when I want it, and not have to wait.

 

Ken

[B&W]

I suppose that if life was intolerable, the Government would be voted out... I've never been to Norway but Sweden is an especially fine place to visit.

 

Norway is a nice place, but rather expensive

 

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[stunsworth]

Leica, if you're listening--sending us a price list in Euros is like sending an European resident a price list in US Dollars.

 

To be honest I think most people in Europe have at least a rough idea what the dollar to Euro/Sterling exchange rate is.

[bnelson]

If Leica really wants to please/reward the early adopters of the M8 they should make sure each purchaser gets a 30% discount from the list prices in that country.

 

In my case (United States) it seems somewhat unfair that I should have to pay the 19% German VAT when there is no VAT here in the US.

 

Not only would a TRUE 30% discount reward the early adopters, it would most certainly provide a jump in M lens sales for the first half of 2007 and since they are not including any dealers in the program it would cost them very little since they do not have to pay the dealer discount. It really looks like a win/win to me with the exception that the dealers do not participate.

 

I continue to be amazed with the continued lack of understanding of the public relations problem Leica is having with these M8 problems and their inability to "get ahead of the curve" in handling them. To promise a 30% discount on a lens purchase is very generous but to price it such that a the US buyers do not receive to true 30% negates much of this generosity plus it will create more ill will.

 

In the end it will not really affect how I feel about my M8 (coming tomorrow) but it will affect how I feel about the management of Leica in general.

 

Bill

[wattsy]

I continue to be amazed with the continued lack of understanding of the public relations problem Leica is having with these M8 problems and their inability to "get ahead of the curve" in handling them. To promise a 30% discount on a lens purchase is very generous but to price it such that a the US buyers do not receive to true 30% negates much of this generosity plus it will create more ill will.

 

I agree. I'll probably be accused now of not "holding hands" and "supporting Leica in their hour of need" but to me the company seems to be engaged in one cock-up after another. For the consumer, the simplest solution would be to give each M8 owner a voucher that they can take to their dealer (and get a 30% discount) or maybe offer the discount as a mail-in rebate. However, for Leica this doesn't benefit their bottom line as much as a direct cash sale to Leica AG. I guess the company is in such dire straights financially that they simply cannot afford to do "the right thing". Combine this problem with their current 'headless chicken' management approach and it's a recipe for the mess they seem to be in.

[B&W]

If Leica really wants to please/reward the early adopters of the M8 they should make sure each purchaser gets a 30% discount from the list prices in that country.

 

In my case (United States) it seems somewhat unfair that I should have to pay the 19% German VAT when there is no VAT here in the US.

 

 

 

Bill

 

 

Normally, when I buy something from an EU country, the selling company, sells the item without VAT. When the items reach Norway, the custom, send me an invoice for the 25% VAT and a small handling fee. The VAT is based on the invoice from the selling company.

 

This is what I expect from the 30% rebate deal from Leica as well.

[robsteve]

We need some information form the President of Leica USA to clarify this pricing for American and Canadian customers.

 

I am ready to purchase a M8, but I am not prepared to pay in advance for a M8 prior to December 31 without some clarification of this matter.

 

The other problem with this offer is to have Leica closed during the last week this offer is open. There is nobody available to answer any questions.

 

Robert

[carstenw]

If Leica really wants to please/reward the early adopters of the M8 they should make sure each purchaser gets a 30% discount from the list prices in that country.

 

There are more complications than just MSRP. Leica does not normally sell directly to users, and having to ship all these lenses and keep track of all the information must be a real nightmare. Keep in mind that the costs incurred in the production and sale of the lens are all in Germany, regardless of where the lens goes. We have no idea what costs are incurred when a lens gets shipped to the States. It is not simply shipping. Insurance on lenses this expensive is decidedly non-trivial, and there may be legal costs in the States which don't exist in Europe, due to the much higher risk of lawsuits, and so on.

 

In the end, Leica is making an offer. We can decide whether to accept it or reject it. We can not re-design the deal, any more than we can re-design the camera. I suggest just accepting it for what it is and making a personal decision, rather than complaining that some countries getting a higher effective percentage savings than others.

 

If you want a dose of reality from the other side of the fence, I have recently seen an electronics item listed for $599US, and the equivalent european price was €699. The item was made in Europe, IIRC, although to be honest I cannot recall what I was looking at right now. This is the reality of living in Europe, 99% of the time. More commonly, such items have the same numerical price in the States and Europe, although the U.S. dollar is worth 25% less. Just for this one single time, it swings the other way, and we have a thread full of complaints. I am not terribly sympathetic.

 

Anyway, I give up on this thread.

[brunom]

I wonder how Canon or Nikon would have handled it ? At least Leica made an offer, which they didn't really have to do.

 

Bruno

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[cocker]

Of course, Leica can determine its worldwide pricing any way it wants. But if it says "we're offering you a 30% discount" and then says in the fine print "the price includes a charge that doesn't exist" there is a problem. Really. Legally.

 

Legal problem? - Nonsense