Reducing the VAT on E-Books

European Union (EU) finance ministers have agreed to allow EU Member States to apply a reduced rate of VAT  on e-books and other digital publications to align the VAT treatment  so that can be the same as that applied to “hard copy”  versions of books and magazines.

The decision comes after more than two years of talks.

In a statement, the EU said that the measure would allow Members States to align the VAT rates they set for e-publications, which are currently generally taxed at the standard rate. A spokesman for the UK Publishers Association said that the Government must now act to remove “this unfair and illogical tax”on e-books and online subscriptions for magazines/newspapers.

He added that it makes no sense in the modern world that readers are being penalised with an additional 20 per cent tax for choosing digital means for their reading pleasure.

The Association now wants the Government to act quickly, preferably in the Budget later this month, and show the world that the UK is “really serious about building a forward-thinking economy”.

Meanwhile, representatives of the European and International Booksellers Federation (EIBF) have confirmed their view that it shouldn’t matter whether a book is paper or digital, different tax treatment should be avoided.

Julian Borley, Director of VAT at Milsted Langdon, said: “The Budget announcements are due to take place on Monday 29 October and it remains to be seen whether the Chancellor will use this as an opportunity to move forward with these VAT changes or whether BREXIT will be used as a reason to diverge from the EU agreement.”

For more information about how Milsted Langdon can help, please contact Julian by emailing jborley@milstedlangdon.co.uk or calling 0117 945 2500.

Posted in News.