With the Sixth VAT Directive, the European Union adopted a uniform basis for the assessment of goods and services. The Member States are accordingly authorised to have reduced VAT rates for supplies, products or services that have a social or cultural purpose, but these rates must be at least 5 %. Exceptions were allowed in some Member States that already had zero or extra-low rates (below 5 %) on 1 January 1991. Zero rates are used in Belgium, Denmark, Ireland, Finland, Sweden and the United Kingdom for various things, including supplies of printed books, booklets, newspapers, periodicals, brochures, catalogues and similar products. Zero rate VAT for printed books can also be found in other countries in the world, such as Mexico, Ukraine, Albania, India, South Korea, Thailand, Malaysia, most South American countries and some African countries.
Having zero rate VAT on printed and electronic books, booklets, newspapers, etc. should be of great interest to Member States in order to support writers and journalists. Would the Commission be willing to reform the Directive in order to include an exception allowing Member States to adopt zero rate VAT should they so desire?
Answer given by Mr Gentiloni on behalf of the European Commission
In 2018, the Council adopted a Commission proposal, allowing Member States to align the VAT rates they apply to electronic/online publications with the reduced, super-reduced or zero VAT rates already in place in each country for printed publications (notably books, newspapers and periodicals). However, only Member States that already apply a historical super-reduced rate (below 5%) or a zero rate for paper publications may apply such rate to their electronic equivalents.
These new rules were the outcome of a compromise during negotiations amongst Member States, which restricted the initial Commission proposal allowing all Member States the option to use super-reduced VAT rates and a zero rate for electronic publications.
The new rules will apply temporarily, pending the adoption of an overall reform of the rules governing VAT rates proposed by the Commission. The legislative proposal would enable all Member States to apply a zero rate to both printed and electronic publications. A unanimous decision by EU Member States is required for this reform to pass into law.