Italy to challenge EU on ebook reduced VAT rate
- Oct 29, 2015 | Richard Asquith
The draft Italian 2016 budget contains a proposal to reduce the VAT rate on e-books from 22% to 4%, in line with the reduced VAT rate enjoyed by printed books.
The move would put the country in conflict with the March ECJ ebook VAT ruling requiring Luxembourg and France to raise their e-book VAT rates from the reduced rates of 3% and 5.5%, respectively, to their standard rates of 17% and 20%, respectively.
The ECJ ruling held that e-books were a digital service, and not a good, and were not listed in Annex III of the EU VAT Directive as being able to benefit from a reduced VAT rate. All member states were therefore required to apply the higher VAT rates on them.
Poland e-book ECJ case
Last week, Poland applied to the ECJ to overturn the e-book VAT ruling. It contends that fiscal neutrality has been infringed, meaning the application of differing VAT rates was distorting the free market for books. Poland also believed the European Parliament should have been consulted on the compilation of Annex III.