VAT rate on e-books may be reduced




The Council of the European Union has reached agreement to reduce the VAT rate on digital publications such as e-books. The Ministers of Finance of the EU Member States have stipulated that the tariff may be aligned with the reduced rate for physical books.

The current EU directive on a common system of taxation is being adapted to allow member states to apply the lower VAT rate to e-books. For example, paper books and newspapers fall under the lower rate. With the new rules this difference can be lifted and the rates for digital and physical publications can be aligned.

The Dutch minister Hoekstra of Finance has confirmed that the Dutch rate for digital publications is being adjusted, but how fast that is happening is not yet clear, according to the AD . Next year the reduced Dutch rate will increase from 6 to 9 percent; e-books have a VAT rate of 21 percent in the Netherlands for the time being.

According to the current EU directive, electronically delivered services such as e-books can only be offered at the standard VAT rate, with a minimum of 15 percent. A minimum rate of 5% applies to physical books, although some Member States also have permission to carry an even lower rate or even a zero rate.

In June 2017, the European Parliament already approved the possibility of applying the lower VAT rate to e-books, but there were disagreements about this in the Council so far. A discussion has been going on for a long time on the lower VAT rate. The Dutch government has been advocating since 2012. The EU Court ruled in March 2017 that Member States should not set a lower VAT rate when selling e-books and digital media.

The new rules are temporarily valid; the European Commission will eventually come up with a new system for VAT, giving Member States more flexibility to introduce VAT rates.


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