EU VAT on digital enewspapers and online web publishing
At present, most European Union member states levy reduced VAT rates on traditional, paper-based publications and newspapers. However, they still often categorise digital or e-publishing of books and journals at higher, standard rates. The European Commission this week reviewed this position, and explained its plans for the future.
EU reduced vat rates on paper publishing
Many EU states apply zero or reduced VAT rates to paper publications. This is bound-up in the principle that such materials make a vital cultural and educational contribution to society. Whilst this discount is not strictly permitted by European VAT legislation, Directives, they are provided for through temporary derogations if in place prior to the creation of the European Single Market – January 1993.
Online and e-publishing a different VAT service
The EC views the supply of electronic-based reading materials as a different form of supply on two bases:
- They are electronic supplies, which are liable to the normal standard VAT rates according to Article 98(2) of the VAT Directive
- They contain large elements of advance marketing and advertising features, which makes them more commercial in nature and therefore not warranting special consideration for VAT rate derogations.
Also, in general, the EC is not willing to make new exceptions on the application of the standard VAT rate. It views any extension of this general principle as a distortion of the principles of VAT as a general tax on consumption.
New eu Green paper includes review of e-publishing and online print
Whilst a switch to reduced VAT rates for web and online publishing has been ruled out for the present, the EC may review this position in the forthcoming Green Paper on the future of European VAT