The International Publishers Association (IPA) and PriceWaterhouse Coopers have published the results of their latest global survey of VAT charged on books and e-books.
The research covered 51 countries, including 34 European countries (the US was not included because of the ‘complexities’ of its sales tax regime). The report gathers current tax data and also analyses trends.
Since the last report was published, standard VAT rates around the world have been increasing and are, on average, higher in Europe than the rest of the world. EU law also stipulates that booksellers must charge the full VAT rate for e-books while printed books are often granted discounted rates. France and Luxembourg have reduced the rates charged on e-books and the European Commission has initiated court proceedings against them.
All of the major publishing markets in the survey (Argentina, Brazil, France, Germany, Italy, Spain, the UK) provide for reduced VAT rates or exemptions, at least for printed books.
Overall, approximately 50% of countries surveyed continue to apply the standard (i.e. higher) VAT rate to e-books. Overall, Denmark applies the highest VAT rate – 25% on both print and e-books.
The report concludes that the trend towards bringing e-books into special VAT regimes should be encouraged to create a level playing field for all publications, irrespective of the format.
The IPA further stated that the current regime in Europe discriminates against e-books and is “inconsistent, technophobic … and unfair.”
The full report can be downloaded here