Switzerland cuts e-book VAT to 2.5%
Switzerland is to reduce the VAT rate on e-books from 8% to 2.5% on 1 January 2018. This will bring the VAT rate on electronic books into line with that on printed books.
The main Swiss VAT rate will also drop from 8% to 7.7% on the same date.
The European Union has been debating a similar harmonisation of their printed and e-book VAT rates. Currently, under the terms of Annex II of the EU VAT Directive, all 28 member states must charge their standard VAT rate on e-books. Most states have nil or reduced VAT rates on printed books. The anomaly has arisen because the VAT Directive was compiled before the emergence of e-books and so these we no listed in the Annex as qualifying for a reduced VAT rate. The European Court of Justice ruled in 2015 that e-books must still be charged at the higher rate. The EU member states have failed to agree on correcting the difference several times.
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