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France delays VAT hike on books
22.12.11 | Barbara Casassus
The French parliament yesterday voted to raise the reduced VAT rate on physical books from 5.5% to 7% on 1st April 2012, three months later than initially scheduled, in order to give the book industry more time to adjust.
The government had wanted to postpone the increase by only two months, as recommended by councillor of state Pierre-François Racine, to help absorb the 700,000-plus volumes estimated to be in the distribution system.
Although the trade lobbied hard to maintain VAT on books at 5.5%, it was overridden by the need to reduce France’s huge public deficits. The Senate, which has a left wing majority for the first time since the September elections, threw the increase out, but the National Assembly has the last word and reinstated it.
The ministry is now working out tax arrangements for returns, the consequences for authors’ pay and consumer information to explain why the prices charged are higher than those printed on book covers, as the trade is expected to pass the increase on. French law stipulates that the lowest ticketed price applies.
Although regretting the rise, the French Booksellers Association (Syndicat de la Librairie Française, SLF) said the delay would avoid "serious repercussions for bookshops." The latest move does not affect the decision to reduce VAT on e-books in France from the full rate of 19.6% to 7% on 1st January.
Culture minister Frédéric Mitterrand yesterday announced a series of measures to help independent booksellers through the transition. The measures will be drawn up by an ad hoc committee on the sector’s future that will be created shortly and should present its proposals at the end of next March. These will cover bank financing, margins, cash flow, public financial support, and greater access to public library tenders. The committee will also outline a mediation system for the book industry, which has been on the table intermittently for years.
Separately, the Ile-de-France regional council for Paris and the surrounding areas has allocated 250,000 euros in its 2012 budget to help independent booksellers cope with the VAT increase.