The EU’s Economic and Monetary Affairs Committee has voted by a majority of 48 to 1 (with 2 abstentions) to back an EU Commission proposal for e-books to be subject to the reduced rate of VAT.
As mentioned in our previous news article, supplies of physical books may be subject to the reduced rate of VAT (including a zero rate in some countries, like the UK) but the standard rate applies to e-books. The EU’s rapporteur Tom Vandenkendelaere stated after the vote that:
“Our way of reading has changed rapidly over recent years. Now, it makes no sense to apply a double standard whereby an online newspaper is taxed higher than a printed one you buy in a shop. This new directive will give Member States the option to align VAT on digital content with printed matter,”
The proposal will now move to its final step before implementation, which is a vote at the EU Parliament. This will take place on 31 May or 1 June 2017. However, it should be noted that if the vote is carried, other electronically supplied services such as music and video content will continue to be taxed at the standard rate.