Today EU Member States adopted a proposal from the European Commission which puts an end to the unequal treatment between e-newspapers and e-books and their printed equivalent.
Angela Mills Wade, Executive Director of the European Publishers Council welcomed the decision saying “Today’s agreement to align print and digital VAT rates is a very positive step for the professional news media in Europe. VAT rates will now match the reality of how press publications are consumer across the web and on mobile. This development is essential to incentivise further investment in technological innovations in the press sector and we call on Member States to implement the changes without delay.”
After almost two years of discussions, a proposal allowing member states to apply reduced, super-reduced or zero VAT rates to electronic publications,allowing alignment of VAT rules.
EPC has long campaigned for this alignment that puts an end to the double standards of taxation, reflects the reality of the market and consumed choice and makes a meaningful contribution to the completion of the Digital Single Market, allowing publishers to better expand their offers online.
The historical agreement after years of wrangling will
Allow Member States to align the VAT treatment of e-publications, currently taxed at the standard rate, to the more favourable regime currently in force for traditional printed publications.
Super reduced and zero rates are not affected and can be applied to electronic publications although Member States will not be obliged to apply lower VAT rates to e-publications, and will continue to have full control over the budgetary implications.
No EU level definition of the terms book, newspaper and periodical leaving this to Member States as publications are indeed evolving and any specific definition of what is a book, newspaper or periodical risks being outdated within a short time.
As it is the case today, Members States keep their ability to restrict the application of reduced rates to certain books, newspapers and periodicals, e.g. by excluding specific formats or type of content.The market share for e-publications is expected to grow to around 20% by 2021, according to the EC.Find here the text of the Directive as agreed.
EPC calls on Members States to push for this new rule to take effect in their national jurisdictions as soon as possible.