During its meeting of November 6, 2018 the Economic and Financial Affairs Council (ECOFIN) adopted a COUNCIL DIRECTIVE amending Directive 2006/112/EC as regards rates of value added tax applied to books, newspapers and periodicals. The adopted directive allows alignment of VAT rules for electronic and physical publications. From now on, member states will be able to apply reduced, super-reduced or zero VAT rates also to electronic publications.
Under the current VAT rules (directive 2006/112/EC), electronically supplied services are taxed at the standard VAT rate, i.e. minimum 15%, whereas publications on a physical support may benefit from non-standard rates.
For physical publications – books, newspapers and periodicals – member states currently have the option of applying a ‘reduced’ VAT rate, i.e. minimum 5%. Some have been authorised to apply ‘super-reduced’ VAT rates (below 5%) or ‘zero’ rates (which involve VAT deductibility).
The directive will allow member states that so wish to apply reduced VAT rates to electronic publications as well. Super-reduced and zero rates will only be allowed for member states that currently apply them to ‘physical’ publications.
The new rules will apply temporarily, pending the introduction of a new, ‘definitive’ VAT system. The Commission has issued proposals for the new system, which would allow member states more flexibility than at present in setting VAT rates.
Click here to be forwarded to the text of the COUNCIL DIRECTIVE amending Directive 2006/112/EC as regards rates of value added tax applied to books, newspapers and periodicals as available on the website of the European Council/the Council of the European Union.
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