Today the EU relaxed strict tax regulations on electronic publications such as ebooks. The move comes as part of the EU’s proposal to “modernise VAT for the digital economy”, according to Austrian Finance Minister Hartwig Loeger.
The deal follows two years of talks after a proposal by the European Commission back in 2016. It will allow EU members to place reduced or even zero tax rates on electronic publications. This is a massive improvement on the current minimum of 15%, which treats ebooks as electronic services.
Ireland’s current VAT rate on ebooks stands at 23%. This is in stark contrast to the current rate on physical books, which is zero.
EU Economic Commissioner Pierre Moscovici welcomed the decision. “This is good news for the press and for the culture sector,” he said.
There is a caveat, however. Very low or zero rates on ebooks will only be allowed for member states who currently apply similar rates to physical publications. Fortunately for us, Ireland falls into this category.
These reforms are only a temporary measure until a more comprehensive reform of VAT in the EU can be devised and implemented.
This proposed comprehensive reform would allow EU states to have more of a say in what VAT rates they enforce.