Delay to EU progress on e-book VAT

Delay to EU progress on e-book VAT

There has been a delay to progress on the planned measure to allow VAT on e-books to be reduced, after the members of the EU's Economic and Financial Affairs Council (ECOFIN) failed to reach an agreement on the proposals.

EU finance ministers met to debate the measure on Friday (16th June).

Under current EU rules, e-books must be sold at the standard VAT rates of each member state whereas their printed equivalent enjoy reduced or zero rates. In the UK, printed books and e-books are subject to 0% and 20% VAT, respectively.

The European Parliament voted earlier this month to allow individual EU countries to reduce the rate of VAT on e-books to match the rate on printed books.

But at last week's meeting of EU finance ministers, the Czech representative raised concerns about potential VAT fraud and requested a wider a review of the digital services VAT treatment.

Richard Asquith, v.p. of global indirect tax at tax compliance company Avalara, suggested that the delay may "undermine the EU’s credibility to adapt to the digital economy".