EC v-p backs calls for reduced VAT on e-books

EC v-p backs calls for reduced VAT on e-books

The vice-president of the European Commission, Neelie Kroes, has backed a call by European publishing chiefs for the rate of VAT on e-books to be reduced.

Penguin chief executive John Makinson and Hachette commercial director Richard Kitson joined publishers including Riccardo Cavallero of Mondadori; Hedwige Pasquet of Gallimard Jeunesse; and Rudiger Salat of Holtzbrink Verlagsgruppe at a discussion on how to grow e-book businesses, hosted by the Federation of European Publishers and the European Booksellers Federation held in Brussels yesterday.

According to the Federation of European Publishers, Kroes, who is in charge of the digital agenda, will support publishers in their calls to reduce VAT on e-books, but “the goodwill has to come from the finance ministers.”

The Bookseller was also told that publishers called for VAT on e-books to be the same across all countries in the EU. Currently, for example, the VAT rate on e-books in Luxembourg where Amazon’s European headquarters is based is 3%, but in the UK, it is 20%.

The FEP said of yesterday’s round table discussion: “All participants insisted that any cost saving coming from the shift from printed to digital was ‘washed’ by the VAT difference between printed and electronic books.”

The participants also decided it was important for consumers to have the freedom to move material saved in their e-libraries between devices without constraints.   

“Everyone agreed that portability was more an issue of business models than to technical complexities,” the FEP said.

Other issues publishers discussed were signing agreements which would allow authors to distribute books in a particular language in a pan-European basis.