The EC has launched a consultation on lower rates of VAT for electronically supplied publications.
The European Commission (EC) has launched a consultation exploring the option of allowing Member States to apply lower rates of VAT to electronically supplied publications. Currently electronically supplied services are specifically excluded from the reduced rates and the application of lower rates to e-publications has led to the EC taking infringement proceedings against countries such as Luxembourg and France. Where Member States have applied a lower VAT to physical publications, this has led to what has been called distortion of competition.
While acknowledging the differences between printed and electronically supplied publications with regard to the format, the EC note that they offer the same reading content for consumers and the VAT system needs to keep pace with the challenges of today's digital economy. The EC made a commitment in its recent Action Plan on VAT that it will make a legislative proposal in 2016 to allow Member States to apply the same rates to electronically supplied publications that they currently apply to printed publications. Whilst referring to reduced rates this also refers to including zero rates.