The International Publishers Association (IPA) and the Federation of European Publishers (FEP) have released a report (PDF) collecting the VAT rates for print books and e-books in every country that charges them. Publishing Perspectives summarizes the report’s findings, which reveal wide disparities in rates from country to country and region to region.
Among the key findings:
- Denmark applies the highest VAT rate on printed books (25%).
- Hungary applies the highest VAT rate on e-books (27%).
- The average VAT/GST rate applied to printed books is 5.75%.
- The average VAT/GST rate applied to e-books is 12.25%.
Looking at the VAT listings, the rates are pretty much all over the map—literally. There often seems to be little rhyme or reason as to what country charges what rate. This confusing mess of rates is especially bothersome given the changes in European VAT policy at the end of last year.
The new “VAT MOSS” law requires anyone who sells e-books to other countries to obtain and store precise information on the whereabouts of the purchaser, and to apply the specific VAT rate of the country from which the person is purchasing the e-book. At the time, Diane Duane, who operates her own e-book store, was concerned that the new rules could effectively put her store out of business. It doesn’t seem to have done so, however, and that will be one of the topics I will discuss with her during our podcast interview this Saturday.
The report also includes sections making a case for charging zero-rate VATs on both print and e-books and discussing unsuccessful attempts by some members of the EU to apply the reduced-rate VAT on printed books to e-books. The authors of the report insist that reducing the VAT rates, preferably to zero, is the best way to promote reading and education, and improve the circulation of books of all kinds. They hold that e-books should not be an exception just because they are delivered digitally, despite recent rulings by the European Commission saying that they are.
The EU will be conducting a review of VAT laws in 2016, at which time it may make further changes. Hopefully those changes will make it less onerous to buy e-books. We shall see.