Finance Ministers (ECOFIN) meeting today in Luxembourg were apparently blocked by only one Member State and thus failed to reach an agreement on the Commission’s proposal for a directive that aims to amend the current EU VAT rules in order to allow e-publications to benefit from reduced VAT rates, at the discretion of the member states.
The European Publishers Council’s Executive Director said “We are extremely disappointed and frustrated that one Member State was able to block progress on something so simple and straightforward that would benefit both publishers and their readers alike through lower VAT rates on sales. At a time when publishers are expanding press services online, via subscriptions, tablet and mobile apps, pricing will be crucial to the long term viability of non-printed newspapers, magazines, books and journals.”
As we have stated over the years, in our view, this is not merely a taxation issue but a societal and cultural matter. The press is highly price elastic thus the difference in VAT rates often translates directly into greater or lower sales. Currently e-publications are charged a standard VAT rate (a minimum of 15% and often higher), and publications on physical media can benefit from significantly lower rates, which may sometimes be reduced to 0%. The proposal aimed to correct this unfair treatment of press products in print and digital.
Angela continued: The adoption or not of this Directive can affect the future of Europe’s information society and European consumers’ access to quality journalism, information, education and culture at affordable prices. The European Union is aspiring to become a global leader in the knowledge and information society; a hub of innovation and knowledge. The review of VAT rates presents a positive opportunity for the EU to take a leadership role in recognising the value of online press in improving people’s job prospects and in contributing to the Digital Single Market. It is regrettable that this straightforward proposal was not adopted today all for the wrong reasons”.
The European Publishers Council will be urging the next Presidency of the Council to bring this proposal back to the table in the coming months.