On 7 April, the European Commission has presented a Communication on an Action Plan on VAT in order to “reboot the current EU VAT system to make it simpler, more fraud-proof and business-friendly.”
VAT is an issue of particular importance for writers and publishers given that, until now, current rules on VAT have prevented national governments from applying reduced VAT rates to e-books and digital newspapers and magazines, although these reduced rates exist for printed works. As IFRRO had reported at that time, the Court of Justice of the European Union confirmed in 2015 that applying reduced VAT rates to e-books was not possible, e-books being considered as an “electronically provided service” which, as such, cannot benefit from reduced VAT rates.
In the Action Plan, the European Commission acknowledges the problem and is committed to address it in the context of the Digital Single Market Strategy:
[…] “Current rules do not fully take into account technological and economic developments. This is for example the case for e-books and electronic newspapers, which cannot benefit from reduced rates available for physical publications. This issue will be addressed in the context of the Digital Single Market strategy.”
In an accompanying factsheet, the EC announces that it “will attempt to align VAT rates policy for e-publications across the EU”.