Electronic books which are downloaded on Kindle or other e-readers, and publications such as online newspapers will soon cost significantly less. The European Parliament’s Committee on Economic and Monetary Affairs will vote today on a proposal to change EU VAT law. Tom Vandenkendelaere MEP, EPP Group Spokesman on the VAT rates applied to books, newspapers and periodicals, said:
“Member States will have the option to apply the same reduced, super-reduced or 0% VAT rate to e-books and electronic newspapers and magazines that is already applicable to printed publications. Currently, e-publications have to be taxed at the standard VAT rate (minimum 15%) and are not eligible for a reduced tax rate (minimum 5%) as they are considered electronically-supplied services.”
“The e-book market is flourishing and has rapidly gained in importance over the past decade. Today, it makes no sense to apply a double standard whereby a newspaper online is taxed higher than a printed one you buy in the shops. This new Directive will give Member States the option to apply a reduced VAT rate to e-books, newspapers and magazines making it easier for authors, publishers and booksellers to make full use of this new way of reaching the public.”
The reduced tax rates for e-publications are part of the commitments made by the European Commission in the Digital Single Market strategy for Europe and the Action Plan towards a single EU VAT area. To avoid distorting competition across borders in the EU, minimum tax rates are in place for VAT, along with rules on how these taxes should be applied. Governments are free to apply their own national rates above the EU minimums if they so wish.
