/Fiscal equality in the book industry

Fiscal equality in the book industry

A month ago, the Council of Ministers agreed to allow EU member states to lower the value added taxes (VATs) on digital publications, such as e-books, to align these with the VATs on paper books. 

The taxation gap between e-books and paper books may soon be written history. A change that Enrico Turrin of the Federation of European Publishers is very happy about.

“We have been advocating for this for about ten years,” explains Turrin. “Now that it is here, we are enthusiastic about the decision that has been made by the Council.”

For 19 year old bibliophile Hannelore Dalle the tax change seems a good thing. “For books that I know I will only read once or if the book cover is less appealing, and it is not available in the library, e-books are a cheap and useful interim solution.”

Before this directive of the Council, the VATs for e-books were taxed at the standard VAT rate which was at least 15% while paper books were taxed at ‘reduced’ (minimum of 5%) rates, or in some member states even at ‘super-reduced’ (below 5%) or ‘zero’ rates.

So now, every member state can reduce those VATs and the member states which have already made use of ‘super-reduced’ or ‘zero’ rates on their paper books can now also apply them to e-books. This means that consumers will pay less than before for their e-books.

It doesn’t make any sense to have a fiscal discrimination between different kinds of books,” says Turrin. Johannes Bahrke, spokesperson for Banking and Financial Services, Taxation and Customs, and Regional Policy, shares a similar opinion. “What is important is that we treat books and e-books the same, because in the end it is the same content whether you provide it digitally or on paper.”

Because this is a directive, member states are not obliged to lower these VATs. So according to Turrin, it is unsure if this will include an increase in the sales of e-books.

“It will depend on the take-up of the member states, but we hope that as many of them will apply the lower VATs. At least all of them who already have a reduced rate on paper books which is the great majority of the member states.”

Sensory experience

Hannelore do say that she still would prefer paper books over e-books.“E-books are basically the easier solution because as a reader there are many more advantages attached to them. But for me, the most important thing about reading is the sensory experience itself. You can’t just replace that with something digital.”

Turrin is aware of the preferences of the consumers. “By now, you do so much online that at some point you also just want to take some time for yourself offline. Then a paper book is an opportunity to take some time off your screen.”