EU fails to agree on e-Book reduced VAT
- Jun 15, 2017 | Richard Asquith
On 16 June the EU’s Economic and Financial Affairs Council (ECOFIN) failed to reach agreement on reducing VAT rates on e-books to match printed books. The Czech Republic objected to the measure. The lack of a resolution comes after years of seeking to grant e-Books a tax subsidy and boost reading.
e-Books at standard VAT rates
Under current EU rules, e-Books must be sold at the standard VAT rates of each member state whereas their printed equivalent. In the UK, printed books and e-Books are subject to 0% and 20% VAT, respectively. Two rulings at the European Court of Justice in 2014 and 2017 held that only legislative changes by the member states could allow the rates to be equalised.
ECOFIN fails to reach compromise
The Czech ECOFIN representative raised concerns on the e-book change, requesting a wider a review of the digital services VAT treatment. It also raised concerns about potential VAT fraud.
Despite a direct plea by Pierre Moscovici, European Commissioner for tax affairs, the delay may undermine the EU’s credibility to adapt to the digital economy. The discussions will now be pushed back several months.