The Bookseller.com

1st December 2008

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EU opens door for audiobooks tax drop

09.04.08 Alan Osborn

A row taking place in Scandinavia over VAT on audiobooks could help trigger a reduction in the rate charged across the European Union. It is understood that a review of VAT legislation in the EU could lead to audiobooks being reclassified as books or placed on a separate list exempting them from the full charge.

Guidelines issued for the EU review stated that "adjustments for technical reasons and for the sake of coherence and clarity" are to be addressed, and "this might, for example, be the case for audiobooks". Member states set their own VAT rate, but the EU insists that all products attract the full VAT rate unless they are specifically included in a reduced-rate product list. The list includes printed books, but not audiobooks.

Brussels tax spokeswoman Maria Assimakopoulou said that the review could lead to audiobooks being reclassified: "Should audiobooks be assigned a code [ISBN] similar to the number for the paper format, they could equally be considered as books and be eligible for reduced rates." If this occurs, EU legislation could remain the same, with only new formal Commission advice needed to exempt audiobooks.

The Commission could also propose adding audiobooks to the reduced-rate list, which would require a Council of Ministers vote to approve it. However, the list does not compel member states to reduce VAT on the specified products—national publishers associations may still have to petition their own governments. A formal decision is not expected until the summer, Assimakopoulou said.

Either outcome would please the 25,000 petitioners who have written to the European Commission from Sweden calling for the right to pay a reduced rate of VAT on audiobooks. It would also settle a dispute between the Commission and Sweden dating back to 2006, when Brussels ordered Stockholm to end its practice of taxing audiobooks at 6% rather than 25%. Sweden argued that audiobooks should be regarded as a disability aid and treated specially. It has been backed by the Federation of European Publishers, which has called on national publishers associations to petition the Commission.

Citizens of other EU countries have also petitioned Brussels for the right to reduce VAT on audiobooks, though none is from Britain, Assimakopoulou claimed.

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