EU Commission gives e-books VAT rate update

The EU Commission has issued a Public Consultation on the application of reduced rates for electronically supplied publications.

At present these publications are subject to the standard rate of VAT whilst printed publications (i.e. newspapers, bound books, etc) are subject to reduced rates.  As a result, this has created a discrepancy in the tax treatment of products which in the eyes of many people are the same (albeit provided in different formats).

The aim of the consultation is to help the EU Commission be in a position to make legislative proposals by the end of 2016 to unify the rates of VAT applied to electronic and hard copy publications.  This action will probably be welcomed by the Member States, as several of them have enacted such changes already (Italy and Belgium are currently applying different rates, France & Luxembourg did this a few years ago but reverted back to different rates).  It is also likely to be welcomed by the publishing industry as the discrepancy creates a number of VAT complexities for them which would be removed if this change occurred.