VAT for electronic publicationsThe Council of the European Union has adopted Directive (EU) 2018/1713 of the COUNCIL, of 6 November 2018 (OJ of 14 November), regarding the rates of value added tax applied to books, newspapers and periodicals, which helps align the VAT rules applicable to e-publications with the rate applicable to publications supplied on physical means of support. As of now, Member States have the possibility of also applying reduced, super-reduced or zero rates to electronic publications (reduced VAT for electronic publications).

The adoption of the Directive on electronic publications is the result of a political agreement reached by the Council on 2 October, and gives Member States the possibility to introduce reduced VAT rates into their legal systems if they so wish.

According to current rules on VAT (Directive 2006/112/CE), the services provided electronically are taxed at the standard VAT rate, i.e., 21% in Spain, while publications supplied on physical means of support can benefit from lower rates.

In terms of publications supplied on physical means of support (books, newspapers and periodicals), Member States currently have the option of applying a reduced VAT rate, some have been authorised to apply super-reduced VAT rates, 4% in the case of Spain, or, as the case may be, zero rates (in some countries within the European Union).

Thanks to the Directive, Member States wishing to do so can also apply reduced VAT rates to digital books, newspapers and periodicals (reduced VAT for electronic publications). Super-reduced or zero rates will only be applicable in Member States where they are currently applied to publications supplied on a physical support.

The new rules will be applied on a temporary basis until a new and final VAT system is put in place. The Commission has submitted proposals for the new system, which would give Member States greater flexibility when it comes to setting VAT rates.

Bettina Náray

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