EC gives green light for reduced VAT on ebooks

We join European publishers and booksellers in welcoming last week’s announcement from the European Commission to allow member states to reduce VAT on ebooks.

The European Commission has proposed new tax rules which will enable member states to “apply the same VAT rate to e-publications such as e-books and online newspapers as for their printed equivalents, removing provisions that excluded e-publications from the favourable tax treatment allowed for traditional printed publications”.

The announcement makes good on a commitment the EC made earlier this year and follows a Europe wide consultation on the issue, to which we advised our members to respond in August.

In the UK, under the current tax regime, ebooks are charged at the standard VAT rate of 20%, while their printed equivalents are zero rated. We have campaigned on the issue for several years, while the disparity has long been criticised by authors, publishers and booksellers alike. The question now is: what happens next?

The EC announcement does not oblige member states to charge a lower rate of VAT on ebooks, it simply makes it possible for them to do so. As The Bookseller has highlighted the Treasury intends to “carefully consider” the proposals, but any change “will require unanimity between all member states to be imposed”.

As the Government gears up for Britain’s departure from Europe, we are keen to see the process move forward as quickly as possible, with VAT on ebooks reduced to 0% in line with printed publications. According to The Publishers Association “if there is political will the proposed Directive could be adopted within the next six months”.

Nicola Solomon, Chief Executive of The Society of Authors said:

“When VAT was first proposed back in 1969, it was introduced with the clear principle that to avoid it becoming a tax on knowledge, books, journals, newspapers and broadcasting should be zero rated. The EC announcement is a welcome, but long overdue, return to that principle. We urge Government to work with publishers and booksellers, and with their European counterparts, to enable change to happen as smoothly as possible. It would be a shame if this excellent initiative were lost in the Brexit process, in particular since having two different rates already causes difficulties, for example, with academic books where the physical and digital versions are sold together as a package.”

Many thanks to all SoA members who joined us in contributing to the consultation.

COMMENTS

Niall Slater (02/02/2017 05:00)
" Hi Brian - just for the record, we do! Our work on this is through the EWC and other EU partner bodies. Do feel free to drop us an email if you have further questions."
Brian St. Pierre (11/01/2017 06:22)
" Welcome, and way overdue, but the "unanimity among member states" aspect is, as always, troublesome, in itself and as far as a timetable goes (those of us who have worked with the EU know how often one or two countries lag behind and hold up change!). Is the SofA working with writers' organizations in Europe to try and accelerate this change?"
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