UK consumers could end up paying less for e-books following the European Parliament’s vote to allow individual EU countries to align the VAT rate of e-books to the rate applicable to printed publications.
E-books are currently taxed in the UK at the standard rate of 20%, as EU rules have only allowed a reduced rate, zero in the UK, to apply to printed publications.
After today’s vote (590 votes to eight, with ten abstentions), individual countries will be allowed more flexibility to align the VAT rate of e-books to the rate applicable to printed publications.
Alan Peace, VAT partner at Blick Rothenberg, said: "The newspaper and book industry, not to mention Kindle and other suppliers of e-books, will be waiting with baited breath to learn what the UK government decides to do on this issue."
He added: “There are a number of possible scenarios; to reduce the VAT on e-books to zero, reduce the VAT on e-books to 5% but at the same time increase the VAT on printed books to 5%, or simply leave the rate for e-books at 20%.”
For more information please contact Alan Pearce.