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UK brings forward e-book and electronic publications VAT cut

  • Apr 30, 2020 | Richard Asquith

The UK is to bring forward the VAT cut on e-books, online newspapers and journals to 1 May 2020. It was originally scheduled for 1 December 2020. The acceleration of the measure is aimed at supporting newspapers, many of which have ceased publishing their paper versions due to the COVID-19 crisis.

This means electronic books, online journals or newspapers and other digital publications will be nil-rated for VAT instead of subject to the standard 20% VAT rate.

The UK Chancellor, Rishi Sunak, in March announced that the UK would harmonise the VAT rate on digital publications with those of printed equivalent which are set at nil. This would apply to electronic or online books, newspapers, magazines and academic publications.

This follows many EU states which have cut digital publications VAT rates. VAT on electronic publications has been described as a ‘tax on reading’ and has been consistently challenged by the publishing industry.

Globally, VAT (also known as GST, general sales tax, in some countries) treatment of books and e-books varies widely. Only 22% of countries apply the standard rate of VAT to printed books while 69% apply standard VAT to e-books, according to figures from the International Publishers Association. The average rate of VAT/GST on printed books is 5.75% compared to the average for e-books of 12.25%. In Europe, Denmark applies the highest VAT rate on printed books (25%) while Hungary has the highest VAT rate on e-books (27%).

Need help with your UK VAT compliance?

Researching UK VAT legislation is the first step to understanding your VAT compliance needs. Avalara has a range of solutions that can help your business depending on where and how you trade. 

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is the former VP Global Indirect Tax at Avalara
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