On-going EU impact on VAT – Plan for E-books to be aligned with Printed Books
News out on 3 May from the EU Parliament confirms that the EU Parliamentary committee on Economic and Monetary Affairs has voted to approve the proposal to align the VAT treatment on e-books with that of printed books. We will still need to wait for the full Parliament to vote on any change to the VAT treatment and this vote is expected on May 31st or June 1st.
The proposal would allow member states to charge a reduced rate of VAT to align them to printed matter. This does differ slightly in the UK as we apply a zero rate to most qualifying printed matter but as the intention is to align with the printed matter treatment it would be expected that the UK would be able to apply the zero rate for sales in the UK of e-books. We will await confirmation.
It does raise an issue for web sites and MOSS users where private consumers purchase an e-book as the VAT liability on the sale of Digital Services in each member state will need to reflect the VAT rate change once it is confirmed. EU member states have a range of reduced rates they apply to qualifying items so once any change is confirmed website pricing will need to be adjusted.