Reduced VAT rate for e-publications approved by European Parliament
An EU Commission proposal to enable Member States to charge a reduced rate of VAT on e-books – bringing them into line with VAT levied on printed matter – has been endorsed by the European Parliament by 590 votes to 8, with 10 abstentions.
Currently, e-books have to be taxed at an EU minimum standard rate of 15%, whereas Member states are free to charge the reduced rate of at least 5% — and in some cases like the UK, even zero-rates — on printed publications.
The rapporteur Tom Vandenkendelaere (EPP, BE) said: “Our way of reading has rapidly changed over recent years. Now, it makes no sense to apply a double standard whereby an online newspaper is taxed higher than a printed one you buy in a shop. This new Directive will give Member States the option to align VAT on digital content with printed matter.”
This follows a recent ECOFIN debate and a vote by the European Parliament’s Economic and Monetary Affairs committee to lower VAT rates on e-books, aligning them with printed books. The proposed Directive requires unanimity for adoption by the Council, after this consultation of the European Parliament.
CTG has welcomed this helpful development, which we proposed in a response to a Commission consultation last year. Full details of the consultation response are available here.