The Bookseller.com

2nd December 2008

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Audio book publishers made to wait on VAT

14.07.08 Alan Osborne

Publishers of audio books toasting European Commission proposals that they be subject to reduced rate VAT must wait until January 2011 to cut their prices. That is the date the proposed change in European Union (EU) VAT directive covering audio books would come into force, and it would still need writing into national statute books.

This assumes that there are no problems with the approval by the European Parliament and the EU Council of Ministers of the proposal - part of a comprehensive legislative package of EU VAT reform. If there are difficulties securing agreement, this implementation date could be pushed back.

Under the proposals, the commission wants audio-books (defined as "CDs, CD-ROMs or any physical support that predominantly reproduce the same information content as printed books and which do not include other material such as games") to be eligible for reduced rate VAT.

That said, the law would be optional: the reduction would only come if a member state chose to implement it. The legislation leaves the EU's national governments with the option of levying full rate VAT on audio books if they choose. VAT law is only partly harmonised within the EU. Member states can set their own full rates.

UK publishers could lobby for the UK government to apply a reduced rate earlier as has happened in Sweden, where audiobooks are already being sold, illegally, at the reduced VAT rate of 6%. According to the Federation of European Publishers, the commission does not plan to pursue Sweden over this breach.

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