EU Announces Changes to VAT on eBooks

[owly]

I found this on Goodreads http://goodereader.com/blog/e-book-n...-vat-on-ebooks but I can't find their source.

"The European Court of Justice has just concluded that EU member states are free to charge differing rates of VAT on eBooks and paper books. This will allow all countries in Europe to basically change their VAT on all books and not break ‘fiscal neutrality’, an EU concept whereby markets for the same goods are distorted by varying tax rates..."

This could really impact Swedish ebook prices. Currently paper books have 6% VAT, ebooks 25%.

Anyone have more info?

[Luffy]

I'd like a confirmation as well. Anyone?

[Billi]

In my mind, this quote from your link

The European Court of Justice has just concluded that EU member states are free to charge differing rates of VAT on eBooks and paper books.

can be interpreted like the blog author did:

This will allow all countries in Europe to basically change their VAT on all books and not break ‘fiscal neutrality’, an EU concept whereby markets for the same goods are distorted by varying tax rates.

Or it can be interpreted that everything will stay the same, that, for instance, Germany can charge different taxes for ebooks and for paper books and different tax rates than Luxemburg or France and we won't have common tax rates above all countries.

[Nate the great]

I covered this story:
http://the-digital-reader.com/2014/0...-taxes-ebooks/

Here is the actual text from the ruling:

The first subparagraph of Article 98(2) of and point 6 of Annex III to Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2009/47/EC of 5 May 2009, must be interpreted as not precluding, provided that the principle of fiscal neutrality inherent in the common system of value added tax is complied with, which is for the referring court to ascertain, national legislation, such as that at issue in the main proceedings, under which books published in paper form are subject to a reduced rate of value added tax and books published on other physical supports such as CDs, CD-ROMs or USB keys are subject to the standard rate of value added tax.

After you remove the subordinate clauses, I'm pretty sure the ruling says that there is nothing in the current regulations to preclude charging one VAT for paper books and another higher VAT for ebooks on CD.

But we may need to get a lawyer to parse it for us.

[fjtorres]

Originally Posted by Nate the great

I covered this story:
http://the-digital-reader.com/2014/0...-taxes-ebooks/

Here is the actual text from the ruling:


After you remove the subordinate clauses, I'm pretty sure the ruling says that there is nothing in the current regulations to preclude charging one VAT for paper books and another higher VAT for ebooks on CD.

But we may need to get a lawyer to parse it for us.

And it says nothing about digital downloads?
Those aren't sold *on* any physical "supports" in that list.

That sounds like a ruling from the CD-ROM era.

[Nate the great]

Originally Posted by fjtorres

And it says nothing about digital downloads?
Those aren't sold *on* any physical "supports" in that list.

That sounds like a ruling from the CD-ROM era.

It is very narrowly focused, yes.

[ApK]

Originally Posted by Nate the great

But we may need to get a lawyer to parse it for us.

Yes, and I R not 1, but using language and logic only, the fact that they chose to explicitly say "physical" rather than a broader term like "media" which may more easily be extended to non-physical things like "electrical signals" or "magnetic flux patterns" suggest to me that they really do only intend this to apply to physical items, not digital delivery.

[happysnapper22]

Remember this is the EU, whatever gave you the idea that anything they do is for your benefit. Expect to pay more.

[xendula]

I think I read somewhere that the French or Luxembourg were trying to not charge any taxes on books (p?e?) and the EU was fircing them to, so that's great news!

ETA: OK, I was a bit off:

France taken to European court over e-book VAT rate

France is facing court action over its continued use of reduced VAT rates for e-books in contravention of EU rules.

The European Commission has referred France to the European Court of Justice (ECJ) over the 5.5% VAT rate charged on e-books, compared with 20% in the UK and 19% in Germany.

[Sweetpea]

Originally Posted by Nate the great

It is very narrowly focused, yes.

Considering ebooks that are for academic purposes, as long as they are on a physical carrier, were already allowed to be sold for the low VAT, I doubt it will work for digital downloads, as those are not books, but services... (still a stupid concept that if you get a file on a USB stick it's a different thing than that same exact file (to the last bit) you pull from a server...)

[Nate the great]

Originally Posted by ApK

Yes, and I R not 1, but using language and logic only, the fact that they chose to explicitly say "physical" rather than a broader term like "media" which may more easily be extended to non-physical things like "electrical signals" or "magnetic flux patterns" suggest to me that they really do only intend this to apply to physical items, not digital delivery.

Yep. That is a detail most missed.

[Mivo]

Originally Posted by Sweetpea

Considering books that are for academic purposes, as long as they are on a physical carrier, were already allowed to be sold for the low VAT, I doubt it will work for digital downloads, as those are not books, but services...

In Germany, books of any kind, not just academic ones, always had a substantially lower VAT than other goods (7% vs. 19% currently). Printed books are considered "a cultural good", but e-books aren't. Yep, they are "services" and treated much like software.

Well, regardless of what the EU decides, if you give a government a free choice between lowering the tax rate or keeping it at the present level, the chance of the former happening is somewhat slim, so nothing will likely change.

What is need is a ruling that gives e-books the same status that printed book have -- and with it, also the right to re-sell them, too.

[Froide]

Originally Posted by owly

This could really impact Swedish ebook prices. Currently paper books have 6% VAT, ebooks 25%.

25%!

[HarryT]

Originally Posted by Froide

25%!

This is the standard rate of VAT in Sweden, so yes, it's the rate used for ebooks, just as it's used for pretty much everything else.

[Little.Egret]

Originally Posted by Mivo

[...]

Well, regardless of what the EU decides, if you give a government a free choice between lowering the tax rate or keeping it at the present level, the chance of the former happening is somewhat slim, so nothing will likely change.

You forget that both France and Luxembourg reduced their VAT on e-books.

And many governments, such as the Irish Republic, have reduced their rates of Corporation Tax in an effort to attract international businesses.