Spain 21% VAT rate on digital newspapers ebooks
- Jan 6, 2014 | Richard Asquith
Spain has ruled that digital downloads of newspapers and books must be charged at the standard rate of 21%.
Currently, print versions of books, newspapers etc. attract the reduced Spanish VAT rate of 4%. In a recent case that the Directorate General of Taxation, it was clarified that the digital versions of these products could not benefit from this lowered tax rate, and would instead face the Spanish standard VAT rate.
The conclusion was based on a close interpretation of the EU VAT Directive. This clearly states that print versions of books etc. may benefit from the reduced VAT rates applicable at the time of a country’s entry into the European Union, if applicable. It makes no mention of the equivalent digital version since they were not envisaged at the time of the preparation of the VAT directive.
European Commission seeks higher VAT on digital ebooks
This ruling comes as the European Commission seeks to force all other EU countries charging reduced VAT rates on digital goods to shift to their national higher rates. This includes referring France to the ECJ in November 2013. The EC referred Luxembourg on its 3% ebook VAT rate in the autumn of 2013.
VP Global Indirect Tax
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 can be contacted at: email@example.com. 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.