E-books and other online publications, such as online papers and magazines, will soon become cheaper. Today, the European Parliament approved a new proposal to change European VAT legislation regarding online books, newspapers and magazines. Tom Vandenkendelaere MEP was in charge of negotiations:
“From now on, Member States will be able to apply the same reduced, super reduced or 0% VAT rate to online publications which is already applicable to printed publications. Currently, online publications are still taxed at the standard VAT rate (minimum 15%) as they are considered services, not goods, thus creating an unfair commercial disadvantage for online publications. If we want to be serious about completing the Digital Single Market, we will need to break down all remaining barriers to online content."
“The e-book market has boomed over the past ten years. Today, it makes absolutely no sense to continue taxing online publications at a higher rate than printed publications. This double standard has to go. The 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. This will not only result in lower prices and higher accessibility to online publications, but will also drive innovation and investment."
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 wish so. The Directive will be on the Council’s agenda on June 16.