Trust Bloomberg Tax for the international news and analysis to navigate the complex tax treaty networks and global business regulations.
By Joe Kirwin
Sept. 13 — The European Commission is committed to equalizing the value-added tax rates for digital and print publications despite a week-old legal opinion that justifies higher online rates.
The European Union's executive body insisted it will follow through with its policy reversal by the end of 2016 despite a 2015 court victory on separate rates, and the Sept. 8 European Court of Justice legal opinion (C-390/15) backing the disparate rates.
“We intend to present a proposal to bring both products in line with each other by the end of the year,” European Commission spokesman Vanessa Mock told Bloomberg BNA Sept. 9. “Meanwhile, work on an impact assessment to this effect has already started and we have also launched a public consultation to gather views.”
The ECJ advocate general's legal opinion, on a case stemming from a Polish Constitutional Court challenge, found that different VAT rates for printed and digital publications are legal because competition doesn't always exist between the two types of products (175 TMIN, 9/9/16).
Not only is the European Commission undeterred by the ECJ legal opinion, but many in the European publishing industry—whether newspapers, magazines, periodicals or books—didn't flinch in their conviction that the EU must continue to pursue reduced VAT rates for digitally delivered publications.
“The current case is based on the current VAT directive and we want to believe that the European Commission's plans are forward-looking,” Nikolas Moschakis, a policy adviser for the European Publisher's Council, told Bloomberg BNA Sept. 12. “Journalistic and literary content in digital form still retains the benefits to society that were originally recognized when providing for reduced VAT rates.
“Technological transformation from analog to digital continues to progress and has become a significant part of our lives, giving the possibility to publishers to provide citizens with new formats, and this should be reflected in the VAT legislation,” Moschakis said.
The European Magazine and Media Association noted that while the ECJ opinion “deals with the outdated law on VAT,” the ECJ legal adviser also said it is up to the EU legislature to adopt changes.
“This is what the European Commission is currently doing,” Max von Abendroth, president of the EMMA, told Bloomberg BNA Sept. 12. “President Juncker's announcement to propose an amendment that will allow member states to apply reduced, super reduced or zero rates to digital newspapers and periodicals is exactly what Europe needs if it wants to maintain a free and independent press in the digital age” (81 TMIN, 4/28/15).
The European Commission public consultation on reduced VAT rates for digital publications was launched July 25 and is open until Sept. 19. The commission is seeking the opinion of not only the publishing industry but also paper producers and the printing industry on the overall impact of the proposed legislative VAT change.
Once the legislation has been proposed, it will require the unanimous consent of all 28 EU member countries in the Council of Ministers.
“Our biggest concern at this point is that a proposal for the VAT change will get caught up in other political issues in the Council of Ministers,” Moschakis said. “As we have seen many times in the past, it can be very difficult to get the unanimous consent required for tax legislation.”
To contact the reporter on this story: Joe Kirwin in Brussels at email@example.com
To contact the editor responsible for this story: Rita McWilliams at firstname.lastname@example.org
The VAT consultation document is at http://ec.europa.eu/taxation_customs/consultations-get-involved/tax-consultations/public-consultation-on-reduced-vat_en.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)