The European Union has approved on Tuesday the proposal that will allow countries that wish to apply the reduced VAT to electronic publications to match their tax to that of traditional books. The initiative, presented in 2016, and after three failed attempts in the two previous years by the opposition of the Czech Republic has reached the necessary support. "The proposal is part of our efforts to modernize VAT for the digital economy, and allows us to keep pace with technological progress," said Austrian Finance Minister Hartwig Löger, whose country chairs the EU this semester.
Currently, e-books are taxed at a standard minimum rate of 15%, while countries can impose the reduced rate (minimum of 5%), super reduced (below that percentage) or zero rate on paper publications . With the new norm, the Executives will be able to decide if they also tax with digital reduced rates, as long as the super-reduced and zero rates are already applied to the physical publications.
In Spain, where electronic books have grown by 16.4% in 2017, digital readers pay 21% while paper users pay 4%. The previous legislation meant greater difficulty in the fight against fraud and in the development of the digital economy.
The European Parliament has already given its approval to the proposal and after the green light of the countries the measure will come into force. These rules will apply temporarily until the community club agrees to the new VAT system proposed by Brussels, which provides for more freedom for countries to decide which rates apply to each product. The Commissioner of Economic and Monetary Affairs, Pierre Moscovici, has welcomed the new rule, which he described as a "real breakthrough", and has defended that "a book is a book regardless of the support".