EU to Determine Scope of Lower VAT for Digital Publications

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By Joe Kirwin

July 25 — The European Commission has launched a public consultation to more precisely determine which “electronic publications” would qualify for lower value-added tax rates due to be proposed in the coming months.

The commission hopes to determine whether the lower rates should apply not only to newspapers, magazines and books but all periodicals—including scientific journals—that are sold online. In addition, the EU European Union's executive body's July 25 consultation notice seeks information on the impact the lower VAT rates would have on the EU printing industry, as well as on the paper and pulp industry.

“The European Commission is committed to lowering VAT rates on digital legislation, but it is important before the legislation is proposed later this year to get feedback from stakeholders on some key issues,” a commission official, speaking on the condition of anonymity, told Bloomberg BNA July 25.

“The most important issue concerns the definition and scope of electronically supplied publications,” the official said. “Then there is the issue of the impact on printers and others that supply materials for print publications.”

The legislation was announced by the commission in April when it said it would call for digital publications to benefit from the low rates currently allowed printed publications, as part of an overall VAT overhaul plan to be rolled out over the next year and a half (67 TMIN, 4/7/16).

Currently, the 28 EU-member countries have a wide range of low VAT rates for print publications.

Policy Reversal

In 2014, a special High-Level Expert Group on Taxation and the Digital Economy set up by the commission recommended that rates for paper publications be raised to the those of electronic publications. The recommendation was in line with a 2012 European Commission decision to take France and Luxembourg to the European Court of Justice for allowing VAT on electronic books at rates of 5.5 percent and 3 percent, respectively, instead of rates of 20 percent and 17 percent, which are charged for other goods and services in the two countries, respectively.

The ECJ backed the European Commission in a 2015 ruling (44 TMIN, 3/6/15).

Following the 2015 ECJ ruling, groups such as the European Newspapers Association, the European Magazine Media Association and the Federation of European Publishers launched an intensive lobbying campaign to get the European Commission to commit to a VAT policy shift.

The publishers began making headway in their arguments in 2015 when current European Commission President Jean-Claude Juncker took office and committed to reverse what he said was discrimination against electronic publications.

“As book publishers continue investing in technology and content creation to offer the best experience to their customers, the elimination of the tax discrimination will further support our modern and diverse European book market in digital as in print,” FEP President Pierre Dutilleul said in a May statement after the EU finance ministers backed the European Commission VAT overhaul plan published in April.

The key question to be answered in the coming months is whether the low rates will extend to the growing number of periodical, policy and other publications sold online in the EU.

To contact the reporter on this story: Joe Kirwin in Brussels at

To contact the editor responsible for this story: Rita McWilliams at

For More Information

The European Commission's July 25 consultation notice is at

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