*Update*: The Economic and Financial Affairs Council adopted a directive which amends the existing EU VAT directive (2006/112/EC) in order to allow Member States to apply the same VAT rate to e-publications (such as e-books and online newspapers) as for their printed equivalents, removing provisions that excluded e-publications from the favourable tax treatment allowed for traditional printed publications. It followed a proposal adopted in October. Keep up to date with developments here.

CTG responded to the European Commission consultation on reduced VAT rates for electronically supplied publications (which includes e-books and e-periodicals). The consultation followed a commitment in the 2016 Action Plan on VAT to publish a legislative proposal to allow Member States to apply to electronically supplied publications the same VAT rates as those that apply to printed publications.

CTG’s response called for Member States to be given the flexibility to introduce reduced and possibly zero rates for e-books and other e-publications, including e-periodicals. An increasing number of charities are communicating with their donors and beneficiaries online and it is important that irrecoverable VAT does not become an obstacle to this or an additional cost. Allowing a reduced rate for electronic medical research publications, for example, will enable charities to share research, ideas and knowledge, for their benefit of the causes they are working to support.

Following Brexit it remains uncertain what, if any, changes will apply to the UK VAT system. However, regardless of whether the outcome of this consultation will be binding on the UK its outcome will be important, given the cross-border nature of digital publications. The UK also remains subject to all relevant EU law (including VAT law) until the time that the exit from the EU is finalised.

For more information on VAT zero rates for books and publications click here.