Governments of EU countries will soon be allowed to apply the same reduced VAT rates to ebooks that they are able apply to physical ones.
At the moment, EU rules dictate that ebooks must be taxed at a minimum VAT rate of 15%, even though governments are allowed to tax physical books at reduced VAT rates of 5% or even super-reduced or zero rates.
But EU finance ministers agreed on 2 October to scrap that rule, and give governments the same VAT options for ebooks that exist for their physical cousins.
“This proposal is part of our efforts to modernise VAT for the digital economy, and enables us to keep pace with technological progress,” said Austria’s finance minister Hartwig Löger.
The European and International Booksellers Federation welcomed the move, the news website Publishing Perspectives reported.
“Today’s decision finally resolves a long-standing issue,” the EIBF stated. “Whether a book is paper or digital, ordered online or bought in a shop, different tax treatment that hampers access to books should be avoided.”
The change will come into force as soon as the decision has been translated into the 24 official EU languages.