Plans to allow EU member states to reduce the VAT charged on e-books have moved a step closer, after a committee of MEPs voted in favour of the proposals to bring the VAT rates for printed and online publications into line
The EU Commission proposal was backed by the 48 votes to one with two abstentions in the economic and monetary affairs committee. The proposal will now be voted by Parliament as a whole on 31 May or 1 June.
Previously e-books have not been eligible for a reduced VAT rates - which printed publications such as books and newspapers enjoy - because they are classified as an ‘electronic service’.
Currently, e-books have to be taxed at an EU minimum standard rate of 15%, whereas member states are free to charge the reduced rate of at least 5% -- and in some cases, zero-rates -- on printed publications.
In the UK e-books attract a 20% VAT charge, where print books have a zero-rate of VAT, which has long been seen as unfair by the book trade.
The move to bring the VAT treatment of online and printed publications into line was originally floated at the end of last year, as part of the EU’s action plan for its VAT digital single market package.
Belgian MEP Tom Vandenkendelaere, who brought the motion before the committee, said: ‘Our way of reading has changed rapidly over recent years. Now, it makes no sense to apply a double standard whereby an online newspaper is taxed higher than a printed one you buy in a shop.
‘This new directive will give member states the option to align VAT on digital content with printed matter.’
Music and videos, as well as publications predominantly consisting of music and video content, would continue to be taxed at the standard VAT rate.