Price of ebooks expected to plunge as EU orders Britain to cut VAT from 20% to zero

By Neil Craven, Financial Mail On Sunday

 19 October 2013 | 

The price of ebooks in Britain is expected to plummet following a vote in Brussels this week that could cut VAT on them from 20 per cent to zero.
In Britain, printed books are free of VAT but ebooks attract 20 per cent. In other EU countries ebooks already have lower rates of VAT. In France, for example, printed books and ebooks are taxed at 5.5 per cent, and in Luxembourg both are 3 per cent.
The vote is expected to harmonise VAT on ebooks with printed books throughout Europe.

Experts said abolishing the rate could cut the price of an ebook by £1 or more if firms such as WH Smith and Amazon pass on the savings.
Books are considered to be an essential contribution to society and, along with other products such as children’s clothing, receive the favourable VAT rating.

 

The EU has stepped in because some countries already charge VAT on ebooks in line with printed books. Germany and Spain, like Britain, have different rates.
Countries are expected to vote in favour of the proposal, put forward by Poland, to enable European firms to compete against websites based in some non-EU countries where the VAT on ebooks is already zero.

‘Most of the EU countries are frustrated by the VAT differences on ebooks. The Polish presidency could end up delivering UK readers a real boost whilst levelling the playing field for the region’s digital industries,’ said Richard Asquith, head of tax at business adviser TMF Group.

Last week The Mail on Sunday revealed that ebooks detailing rape, incest and bestiality were available to buy online through a number of leading online sellers, including WH Smith.

WH Smith immediately apologised for the links to the books and said it would remove them as soon as possible.

Read more: http://www.thisismoney.co.uk/money/news/article-2467417/Price-ebooks-plunge-EU-orders-cut-VAT.html#ixzz2iPEhEqhg