Italy e-book VAT rate cut
- 28 December 2016 | Richard Asquith
Italy is to press ahead with a reduction in the VAT rate on e-books, online newspapers or journals from 22% to 4% on 1 January 2016.
The reclassification will be in contravention of the European Court of Justice March 2015 ruling that e-books should be taxed at member states’ standard, higher VAT rate even if printed books are at a reduced rate. This was based on the rule that countries may only apply reduced rates on the exhaustive list of goods or services provided in Annex III of the EU VAT Directive. At the time of the completion of the VAT Directive, electronic books had not been developed.
A number of EU states, including France, Germany and Poland have been campaigning to have the variation changed. Poland asked the ECJ revist its e-book ruling on the basis that it breaches fiscal neutrality and that the European Parliament was not fully consulted on the compilation of Annex III.