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EU VAT on digital enewspapers and online web publishing

  • Oct 2, 2011 | Richard Asquith

EU VAT on digital enewspapers and online web publishing

There have been an increasing number of calls for a change in VAT rates on epublishing and digital e-books. France is considering a cut to 5.5% and Spain is looking at a cut from 18% to 4%.

At present, most European Union member states levy reduced VAT rates on traditional, paper-based publications and newspapers. However, they still often categorise digital or e-publishing of books and journals at higher, standard rates. The European Commission this week reviewed this position, and explained its plans for the future.

EU reduced vat rates on paper publishing

Many EU states apply zero or reduced VAT rates to paper publications. This is bound-up in the principle that such materials make a vital cultural and educational contribution to society. Whilst this discount is not strictly permitted by European VAT legislation, Directives, they are provided for through temporary derogations if in place prior to the creation of the European Single Market - January 1993.

Online and e-publishing a different VAT service

The EC views the supply of electronic-based reading materials as a different form of supply on two bases:

  1. They are electronic supplies, which are liable to the normal standard VAT rates according to Article 98(2) of the VAT Directive
  2. They contain large elements of advance marketing and advertising features, which makes them more commercial in nature and therefore not warranting special consideration for VAT rate derogations.

Also, in general, the EC is not willing to make new exceptions on the application of the standard VAT rate. It views any extension of this general principle as a distortion of the principles of VAT as a general tax on consumption.

New eu Green paper includes review of e-publishing and online print

Whilst a switch to reduced VAT rates for web and online publishing has been ruled out for the present, the EC may review this position in the forthcoming Green Paper on the future of European VAT

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.