European Union set to slash ebook tax rates to ‘end unequal treatment’

The European Union is set to bring in new measures which should see ebook tax rates slashed across Europe.

At present, EU member states largely have to set ebook value-added tax (VAT) at the same level as the country’s standard VAT rate although many countries offer much lower or zero tax rates on print books.

For example, the UK has a standard VAT tax rate of 20% which is applied on ebooks but print books are exempt from the tax.

There has been a lot of protracted debate over recent years on the subject of VAT on ebooks but finally member states will be allowed to align the VAT rates they set for ebooks with the lower rates for print publications.

The European Commission says the decision is the final step to ensure the unequal treatment of paper versus digital becomes a thing of the past.

It adds that the decision will ensure an equal tax treatment of paper and digital products — an important signal for the development of the digital single market and, more broadly speaking, for a digital mindset.

France and Italy have led the push for lower tax rates on ebooks with 5.5% and 4% VAT respectively, while high VAT rates persist in Germany at 19% for ebooks (7% on print books), the Netherlands at 21% (6% on print) and Spain also at 21% (4% on print).

Italy and Malta slash ebook tax rates in Euro VAT inferno