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EU council allows VAT-free status for ebooks and audiobooks

The European Union’s (EU) Economic and Financial Affairs Council (ECOFIN) has agreed to allow all EU member states to reduce the amounts of value-added tax (VAT) on ebooks and audiobooks, bringing them in line with print books, reports the Bookseller.

The decision does not force member states to align VAT rates but means that they can choose to do so. The UK Publishers Association has already called for the UK government to use the new powers, which would bring about a 20% reduction in the tax currently applied to digital publications in the UK—a tax not applied to print publications.

The European Commission proposed the measure almost two years ago, aiming to fix a longstanding problem of tax classification, which saw ebooks and other digital publications categorised as ‘electronic services’ and placed in a different tax category to print publications.

Commissioner for Economic and Financial Affairs, Taxation and Customs Pierre Moscovici said: ‘New figures released by the commission just weeks ago show that member states are still losing €150bn (A$241bn) in VAT each year. Today’s agreements are another step towards addressing that problem and changing VAT rules for the better. Now is the time to seize the momentum and agree on solutions for the more fundamental problems facing the system today.’

CEO of the UK Publishers Association Stephen Lotinga said: ‘The government must act now to remove this unfair and illogical tax on ebooks, magazine and newspaper online subscriptions. It makes no sense in the modern world that readers are being penalised with an additional 20% tax for choosing to embrace digital. We should not be taxing reading and learning.’

‘We are leaving the EU but today’s decision from the ECOFIN committee removes a major obstacle for the UK Chancellor, who should now do away with this tax at the earliest opportunity … The government’s preoccupation with Brexit should not delay him—if the UK does not act quickly it risks the UK digital policy falling behind its European competitors,’ added Lotinga.



Category: International news