BETA


2016/0374(CNS) Value added tax (VAT): rates applied to books, newspapers and periodicals

Progress: Procedure completed

RoleCommitteeRapporteurShadows
Lead ECON VANDENKENDELAERE Tom (icon: PPE PPE) DELVAUX Mady (icon: S&D S&D), LUCKE Bernd (icon: ECR ECR), VAN NIEUWENHUIZEN Cora (icon: ALDE ALDE), LÓPEZ BERMEJO Paloma (icon: GUE/NGL GUE/NGL), SCOTT CATO Molly (icon: Verts/ALE Verts/ALE), KAPPEL Barbara (icon: ENF ENF)
Committee Opinion IMCO
Committee Opinion CULT ZDROJEWSKI Bogdan Andrzej (icon: PPE PPE) Luigi MORGANO (icon: S&D S&D), Liadh NÍ RIADA (icon: GUE/NGL GUE/NGL), John PROCTER (icon: ECR ECR), Michel REIMON (icon: Verts/ALE Verts/ALE)
Committee Opinion JURI
Lead committee dossier:
Legal Basis:
TFEU 113

Events

2018/11/14
   Final act published in Official Journal
Details

PURPOSE: to allow Member States to apply the same VAT rates to publications supplied electronically as they currently apply to publications on any type of physical means.

LEGISLATIVE ACT: Council Directive (EU) 2018/1713 amending Directive 2006/112/EC as regards rates of value added tax applied to books, newspapers and periodicals.

CONTENT: under the current VAT rules (Directive 2006/112/EC), Member States may apply reduced VAT rates to publications on any type of physical means. However, a reduced rate of VAT cannot be applied to publications supplied electronically, which must be taxed at the standard rate of VAT.

This amending Directive allows Member States that so wish to apply reduced, very reduced or zero VAT rates to electronic publications, thereby aligning the VAT rules for electronic and physical publications.

Only those Member States which, on 1 January 2017, applied very reduced rates and zero rates to physical publications will be allowed to apply them to electronic publications.

In order to prevent the extensive use of reduced VAT rates on audiovisual content, the Directive allows Member States to apply a reduced rate to books, newspapers and periodicals only if those publications, regardless of whether they are supplied on physical means of support or electronically (including brochures, leaflets and similar printed matter, children's albums, drawing or colouring books, printed or manuscript forms, maps and hydrographic or similar charts), do not wholly or predominantly consist of music or video content.

ENTRY INTO FORCE: 3.12.2018.

2018/11/06
   EP/CSL - Act adopted by Council after consultation of Parliament
2018/11/06
   CSL - Council Meeting
2018/10/02
   EP - End of procedure in Parliament
2018/05/25
   CSL - Debate in Council
Documents
2018/05/25
   CSL - Council Meeting
2017/07/19
   EC - Commission response to text adopted in plenary
Documents
2017/06/16
   CSL - Debate in Council
Documents
2017/06/16
   CSL - Council Meeting
2017/06/01
   EP - Results of vote in Parliament
2017/06/01
   EP - Decision by Parliament, 1st reading/single reading
Details

The European Parliament adopted by 590 votes to 8, with 10 abstentions, in line with the consultation procedure, a legislative resolution on the proposal for a Council directive amending Directive 2006/112/EC, as regards rates of value added tax applied to books, newspapers and periodicals.

As a reminder, the Commission proposal seeks to grant all Member States, the possibility to apply the same VAT rates to electronically supplied publications as Member States currently apply to printed publications.

Parliament approved the Commission proposal subject to the following amendments:

Subject matter : Members stated that the Directive shall aim at simpler, more fraud-proof and business-friendly VAT systems across the Member States, as well as keeping pace with today's digital and mobile economy. It shall:

stimulate innovation, creation, investment and the production of new content , and facilitate digital learning, knowledge transfer and the access to, and promotion of, culture in the digital environment; promote reading and encourage investment in new content for publishers.

Scope of the Directive : the Commission shall clarify whether the proposed Directive also applies to brochures, leaflets and similar printed matter, children’s picture, drawing or colouring books, music printed or in manuscript form, maps and hydrographic or similar charts.

Blind and visually impaired persons : Members suggested that adapted and audio electronic books, newspapers and periodicals are to be understood as not wholly or predominantly consisting of music or video content. Therefore, reduced VAT rates could also be applied to those formats in order to facilitate access to books, newspapers and periodicals for persons who are blind, visually impaired or otherwise print-disabled.

Towards a better coordinated regime : Members noted that the flexibility granted to Member States in the context of the current proposal in no way prejudges the definitive VAT regime to be rolled out and shall not remove the need for a more coordinated, efficient and simpler system of reduced VAT rates with fewer exceptions.

Follow-up : three years following the entry into force of the Directive, the Commission shall produce a report identifying the Member States that have adopted similar reduced or super-reduced VAT rates for books, newspapers and periodicals and their electronic equivalent, and evaluate the impact of those measures in terms of budgetary implications and development of the cultural sector.

The amended text refers to a resolution of 13 October 2011 in which the European Parliament recalled that one of the key features of VAT is the principle of neutrality and, for that reason, it argued that ‘all books, newspapers and magazines, regardless of format, should be treated in exactly the same way’.

Documents
2017/05/09
   EP - Committee report tabled for plenary, 1st reading/single reading
Details

The Committee on Economic and Monetary Affairs adopted, in line with the consultation procedure, the report by Tom VANDENKENDELAERE (EPP, BE) on the proposal for a Council directive amending Directive 2006/112/EC, as regards rates of value added tax applied to books, newspapers and periodicals.

The committee approved the Commission proposal subject to the following amendments:

Subject matter : Members stated that the Directive shall aim at simpler, more fraud-proof and business-friendly VAT systems across the Member States, as well as keeping pace with today's digital and mobile economy.

Scope of the Directive : the Commission shall clarify whether the proposed Directive also applies to brochures, leaflets and similar printed matter, children’s picture, drawing or colouring books, music printed or in manuscript form, maps and hydrographic or similar charts.

Towards a better coordinated regime : Members noted that the flexibility granted to Member States in the context of the current proposal in no way prejudges the definitive VAT regime to be rolled out and shall not remove the need for a more coordinated, efficient and simpler system of reduced VAT rates with fewer exceptions.

Follow-up : three years following the entry into force of the Directive, the Commission shall produce a report identifying the Member States that have adopted similar reduced or super-reduced VAT rates for books, newspapers and periodicals and their electronic equivalent, and evaluate the impact of those measures in terms of budgetary implications and development of the cultural sector.

Documents
2017/05/03
   EP - Vote in committee, 1st reading/single reading
2017/04/26
   EP - Committee opinion
Documents
2017/04/05
   EP - Amendments tabled in committee
Documents
2017/03/21
   CSL - Debate in Council
Documents
2017/03/21
   CSL - Council Meeting
2017/03/07
   EP - Committee draft report
Documents
2017/02/21
   DE_BUNDESRAT - Contribution
Documents
2017/02/15
   EP - ZDROJEWSKI Bogdan Andrzej (PPE) appointed as rapporteur in CULT
2017/02/06
   BE_CHAMBER - Contribution
Documents
2017/01/30
   PT_PARLIAMENT - Contribution
Documents
2017/01/16
   EP - Committee referral announced in Parliament, 1st reading/single reading
2016/12/08
   EP - VANDENKENDELAERE Tom (PPE) appointed as rapporteur in ECON
2016/12/01
   EC - Document attached to the procedure
2016/12/01
   EC - Document attached to the procedure
2016/12/01
   EC - Legislative proposal published
Details

PURPOSE: to authorise the Member States to reduce the rates of value added tax applied to books, newspapers and periodicals.

PROPOSED ACT: Council Directive.

ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting the European Parliament but without being obliged to follow its opinion.

BACKGROUND: Council Directive 2006/112/EC provides that Member States may apply reduced rates of value added tax (VAT) to publications on any means of physical support. However, a reduced VAT rate cannot be applied to electronically supplied publications, which have to be taxed at the standard VAT rate. In line with the Commission's Digital Single Market Strategy and in order to keep abreast of technological progress in a digital economy, Member States should be enabled to align the VAT rates for electronically supplied publications with lower VAT rates for publications on any means of physical support (minimum 15%).

In the Action Plan on VAT , the current rules on VAT rates do not fully take into account technological and economic developments with regard to e-books and electronic newspapers. It outlined that electronically supplied publications should be able to benefit from the same preferential VAT rate treatment as publications on any means of physical support.

Modernising VAT for the digital economy is also a key objective of the Digital Single Market Strategy .

IMPACT ASSESSMENT: the preferred option is the one which would enable Member States to apply reduced VAT rates lower than the current minimum of 5% or to grant exemptions with deductibility of the VAT paid at the preceding stage to the supply of publications, both on any means of physical support or electronically supplied.

It is estimated that this option could lead to a maximum decrease of VAT revenues for Member States by 2021 by EUR 4.7 billion annually, if all Member States decided to apply the current VAT rates for printed publications as well to e-publications.

CONTENT: the Commission is proposing to amend the VAT Directive in order to grant all Member States, the possibility to apply the same VAT rates to electronically supplied publications as Member States currently apply to printed publications , which include reduced (minimum 5%), super-reduced (less than 5%) and zero rates.

The supply of pure music and video content would continue to be taxed at the standard VAT rate, as would publications that predominantly consist of music and video content. Member States would have the discretion to specify the term "predominantly" in their national VAT law. This solution would also allow Member States to continue to apply a reduced rate for audio books, audio newspapers and periodicals for people with sight loss.

Documents

Votes

A8-0189/2017 - Tom Vandenkendelaere - Vote unique 01/06/2017 11:36:01.000

2017/06/01 Outcome: +: 590, 0: 10, -: 8
DE FR IT PL ES GB RO NL CZ PT BE AT HU BG SE FI SK HR IE DK LT LV SI EL CY LU EE MT
Total
75
57
58
47
45
48
27
21
19
18
19
18
16
14
17
12
12
11
10
11
8
7
7
13
6
5
4
2
icon: PPE PPE
179

Sweden PPE

3

Finland PPE

2

Denmark PPE

For (1)

1

Greece PPE

For (1)

1

Cyprus PPE

1

Luxembourg PPE

2

Estonia PPE

For (1)

1
icon: S&D S&D
151

Netherlands S&D

2

Croatia S&D

2

Ireland S&D

For (1)

1

Lithuania S&D

1

Latvia S&D

1

Slovenia S&D

For (1)

1

Cyprus S&D

2

Luxembourg S&D

For (1)

1

Malta S&D

2
icon: ECR ECR
62

Italy ECR

2

Romania ECR

For (1)

1

Netherlands ECR

2

Czechia ECR

2

Bulgaria ECR

2
2

Croatia ECR

For (1)

1

Lithuania ECR

1

Latvia ECR

For (1)

1

Greece ECR

For (1)

1

Cyprus ECR

1
icon: ALDE ALDE
56

Germany ALDE

For (1)

1

United Kingdom ALDE

1

Romania ALDE

2

Portugal ALDE

1

Austria ALDE

For (1)

1

Croatia ALDE

2

Ireland ALDE

For (1)

1

Denmark ALDE

2
2

Latvia ALDE

1

Slovenia ALDE

For (1)

1

Luxembourg ALDE

For (1)

1

Estonia ALDE

2
icon: GUE/NGL GUE/NGL
45

France GUE/NGL

2

United Kingdom GUE/NGL

1

Netherlands GUE/NGL

2

Czechia GUE/NGL

2

Sweden GUE/NGL

For (1)

1

Finland GUE/NGL

For (1)

1

Ireland GUE/NGL

Abstain (1)

4

Denmark GUE/NGL

For (1)

1

Cyprus GUE/NGL

2
icon: Verts/ALE Verts/ALE
41
4

Italy Verts/ALE

For (1)

1

Spain Verts/ALE

2

United Kingdom Verts/ALE

4

Netherlands Verts/ALE

2

Belgium Verts/ALE

2

Austria Verts/ALE

3

Hungary Verts/ALE

For (1)

1

Sweden Verts/ALE

3

Finland Verts/ALE

For (1)

1

Croatia Verts/ALE

For (1)

1

Denmark Verts/ALE

For (1)

1

Lithuania Verts/ALE

For (1)

1

Slovenia Verts/ALE

For (1)

1

Luxembourg Verts/ALE

For (1)

1

Estonia Verts/ALE

For (1)

1
icon: EFDD EFDD
31

Germany EFDD

1

France EFDD

1

Poland EFDD

1

Sweden EFDD

2

Lithuania EFDD

For (1)

1
icon: ENF ENF
31
2

United Kingdom ENF

For (1)

1

Romania ENF

1

Netherlands ENF

3

Belgium ENF

Abstain (1)

1
icon: NI NI
11

Germany NI

Against (1)

2

France NI

2

United Kingdom NI

Against (2)

2

Hungary NI

For (1)

1
AmendmentsDossier
27 2016/0374(CNS)
2017/03/28 CULT 6 amendments...
source: 602.765
2017/04/05 ECON 21 amendments...
source: 602.780

History

(these mark the time of scraping, not the official date of the change)

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  • date: 2017-02-21T00:00:00 docs: url: http://www.connefof.europarl.europa.eu/connefof/app/exp/COM(2016)0758 title: COM(2016)0758 type: Contribution body: DE_BUNDESRAT
events
  • date: 2016-12-01T00:00:00 type: Legislative proposal published body: EC docs: url: http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/com/2016/0758/COM_COM(2016)0758_EN.pdf title: COM(2016)0758 url: https://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!DocNumber&lg=EN&type_doc=COMfinal&an_doc=2016&nu_doc=0758 title: EUR-Lex summary: PURPOSE: to authorise the Member States to reduce the rates of value added tax applied to books, newspapers and periodicals. PROPOSED ACT: Council Directive. ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting the European Parliament but without being obliged to follow its opinion. BACKGROUND: Council Directive 2006/112/EC provides that Member States may apply reduced rates of value added tax (VAT) to publications on any means of physical support. However, a reduced VAT rate cannot be applied to electronically supplied publications, which have to be taxed at the standard VAT rate. In line with the Commission's Digital Single Market Strategy and in order to keep abreast of technological progress in a digital economy, Member States should be enabled to align the VAT rates for electronically supplied publications with lower VAT rates for publications on any means of physical support (minimum 15%). In the Action Plan on VAT , the current rules on VAT rates do not fully take into account technological and economic developments with regard to e-books and electronic newspapers. It outlined that electronically supplied publications should be able to benefit from the same preferential VAT rate treatment as publications on any means of physical support. Modernising VAT for the digital economy is also a key objective of the Digital Single Market Strategy . IMPACT ASSESSMENT: the preferred option is the one which would enable Member States to apply reduced VAT rates lower than the current minimum of 5% or to grant exemptions with deductibility of the VAT paid at the preceding stage to the supply of publications, both on any means of physical support or electronically supplied. It is estimated that this option could lead to a maximum decrease of VAT revenues for Member States by 2021 by EUR 4.7 billion annually, if all Member States decided to apply the current VAT rates for printed publications as well to e-publications. CONTENT: the Commission is proposing to amend the VAT Directive in order to grant all Member States, the possibility to apply the same VAT rates to electronically supplied publications as Member States currently apply to printed publications , which include reduced (minimum 5%), super-reduced (less than 5%) and zero rates. The supply of pure music and video content would continue to be taxed at the standard VAT rate, as would publications that predominantly consist of music and video content. Member States would have the discretion to specify the term "predominantly" in their national VAT law. This solution would also allow Member States to continue to apply a reduced rate for audio books, audio newspapers and periodicals for people with sight loss.
  • date: 2017-01-16T00:00:00 type: Committee referral announced in Parliament, 1st reading/single reading body: EP
  • date: 2017-03-21T00:00:00 type: Debate in Council body: CSL docs: url: http://register.consilium.europa.eu/content/out?lang=EN&typ=SET&i=SMPL&ROWSPP=25&RESULTSET=1&NRROWS=500&DOC_LANCD=EN&ORDERBY=DOC_DATE+DESC&CONTENTS=3527*&MEET_DATE=21/03/2017 title: 3527
  • date: 2017-05-03T00:00:00 type: Vote in committee, 1st reading/single reading body: EP
  • date: 2017-05-09T00:00:00 type: Committee report tabled for plenary, 1st reading/single reading body: EP docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&mode=XML&reference=A8-2017-0189&language=EN title: A8-0189/2017 summary: The Committee on Economic and Monetary Affairs adopted, in line with the consultation procedure, the report by Tom VANDENKENDELAERE (EPP, BE) on the proposal for a Council directive amending Directive 2006/112/EC, as regards rates of value added tax applied to books, newspapers and periodicals. The committee approved the Commission proposal subject to the following amendments: Subject matter : Members stated that the Directive shall aim at simpler, more fraud-proof and business-friendly VAT systems across the Member States, as well as keeping pace with today's digital and mobile economy. Scope of the Directive : the Commission shall clarify whether the proposed Directive also applies to brochures, leaflets and similar printed matter, children’s picture, drawing or colouring books, music printed or in manuscript form, maps and hydrographic or similar charts. Towards a better coordinated regime : Members noted that the flexibility granted to Member States in the context of the current proposal in no way prejudges the definitive VAT regime to be rolled out and shall not remove the need for a more coordinated, efficient and simpler system of reduced VAT rates with fewer exceptions. Follow-up : three years following the entry into force of the Directive, the Commission shall produce a report identifying the Member States that have adopted similar reduced or super-reduced VAT rates for books, newspapers and periodicals and their electronic equivalent, and evaluate the impact of those measures in terms of budgetary implications and development of the cultural sector.
  • date: 2017-06-01T00:00:00 type: Results of vote in Parliament body: EP docs: url: https://oeil.secure.europarl.europa.eu/oeil/popups/sda.do?id=29560&l=en title: Results of vote in Parliament
  • date: 2017-06-01T00:00:00 type: Decision by Parliament, 1st reading/single reading body: EP docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P8-TA-2017-0233 title: T8-0233/2017 summary: The European Parliament adopted by 590 votes to 8, with 10 abstentions, in line with the consultation procedure, a legislative resolution on the proposal for a Council directive amending Directive 2006/112/EC, as regards rates of value added tax applied to books, newspapers and periodicals. As a reminder, the Commission proposal seeks to grant all Member States, the possibility to apply the same VAT rates to electronically supplied publications as Member States currently apply to printed publications. Parliament approved the Commission proposal subject to the following amendments: Subject matter : Members stated that the Directive shall aim at simpler, more fraud-proof and business-friendly VAT systems across the Member States, as well as keeping pace with today's digital and mobile economy. It shall: stimulate innovation, creation, investment and the production of new content , and facilitate digital learning, knowledge transfer and the access to, and promotion of, culture in the digital environment; promote reading and encourage investment in new content for publishers. Scope of the Directive : the Commission shall clarify whether the proposed Directive also applies to brochures, leaflets and similar printed matter, children’s picture, drawing or colouring books, music printed or in manuscript form, maps and hydrographic or similar charts. Blind and visually impaired persons : Members suggested that adapted and audio electronic books, newspapers and periodicals are to be understood as not wholly or predominantly consisting of music or video content. Therefore, reduced VAT rates could also be applied to those formats in order to facilitate access to books, newspapers and periodicals for persons who are blind, visually impaired or otherwise print-disabled. Towards a better coordinated regime : Members noted that the flexibility granted to Member States in the context of the current proposal in no way prejudges the definitive VAT regime to be rolled out and shall not remove the need for a more coordinated, efficient and simpler system of reduced VAT rates with fewer exceptions. Follow-up : three years following the entry into force of the Directive, the Commission shall produce a report identifying the Member States that have adopted similar reduced or super-reduced VAT rates for books, newspapers and periodicals and their electronic equivalent, and evaluate the impact of those measures in terms of budgetary implications and development of the cultural sector. The amended text refers to a resolution of 13 October 2011 in which the European Parliament recalled that one of the key features of VAT is the principle of neutrality and, for that reason, it argued that ‘all books, newspapers and magazines, regardless of format, should be treated in exactly the same way’.
  • date: 2017-06-16T00:00:00 type: Debate in Council body: CSL docs: url: http://register.consilium.europa.eu/content/out?lang=EN&typ=SET&i=SMPL&ROWSPP=25&RESULTSET=1&NRROWS=500&DOC_LANCD=EN&ORDERBY=DOC_DATE+DESC&CONTENTS=3549*&MEET_DATE=16/06/2017 title: 3549
  • date: 2018-05-25T00:00:00 type: Debate in Council body: CSL docs: url: http://register.consilium.europa.eu/content/out?lang=EN&typ=SET&i=SMPL&ROWSPP=25&RESULTSET=1&NRROWS=500&DOC_LANCD=EN&ORDERBY=DOC_DATE+DESC&CONTENTS=3619*&MEET_DATE=25/05/2018 title: 3619
  • date: 2018-10-02T00:00:00 type: End of procedure in Parliament body: EP
  • date: 2018-11-06T00:00:00 type: Act adopted by Council after consultation of Parliament body: EP/CSL
  • date: 2018-11-14T00:00:00 type: Final act published in Official Journal summary: PURPOSE: to allow Member States to apply the same VAT rates to publications supplied electronically as they currently apply to publications on any type of physical means. LEGISLATIVE ACT: Council Directive (EU) 2018/1713 amending Directive 2006/112/EC as regards rates of value added tax applied to books, newspapers and periodicals. CONTENT: under the current VAT rules (Directive 2006/112/EC), Member States may apply reduced VAT rates to publications on any type of physical means. However, a reduced rate of VAT cannot be applied to publications supplied electronically, which must be taxed at the standard rate of VAT. This amending Directive allows Member States that so wish to apply reduced, very reduced or zero VAT rates to electronic publications, thereby aligning the VAT rules for electronic and physical publications. Only those Member States which, on 1 January 2017, applied very reduced rates and zero rates to physical publications will be allowed to apply them to electronic publications. In order to prevent the extensive use of reduced VAT rates on audiovisual content, the Directive allows Member States to apply a reduced rate to books, newspapers and periodicals only if those publications, regardless of whether they are supplied on physical means of support or electronically (including brochures, leaflets and similar printed matter, children's albums, drawing or colouring books, printed or manuscript forms, maps and hydrographic or similar charts), do not wholly or predominantly consist of music or video content. ENTRY INTO FORCE: 3.12.2018. docs: title: Directive 2018/1713 url: https://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!CELEXnumdoc&lg=EN&numdoc=32018L1713 title: OJ L 286 14.11.2018, p. 0020 url: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L:2018:286:TOC
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Briefing
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  • The European Parliament adopted by 590 votes to 8, with 10 abstentions, in line with the consultation procedure, a legislative resolution on the proposal for a Council directive amending Directive 2006/112/EC, as regards rates of value added tax applied to books, newspapers and periodicals.

    As a reminder, the Commission proposal seeks to grant all Member States, the possibility to apply the same VAT rates to electronically supplied publications as Member States currently apply to printed publications.

    Parliament approved the Commission proposal subject to the following amendments:

    Subject matter: Members stated that the Directive shall aim at simpler, more fraud-proof and business-friendly VAT systems across the Member States, as well as keeping pace with today's digital and mobile economy. It shall:

    • stimulate innovation, creation, investment and the production of new content, and facilitate digital learning, knowledge transfer and the access to, and promotion of, culture in the digital environment;
    • promote reading and encourage investment in new content for publishers.

    Scope of the Directive: the Commission shall clarify whether the proposed Directive also applies to brochures, leaflets and similar printed matter, children’s picture, drawing or colouring books, music printed or in manuscript form, maps and hydrographic or similar charts.

    Blind and visually impaired persons: Members suggested that adapted and audio electronic books, newspapers and periodicals are to be understood as not wholly or predominantly consisting of music or video content. Therefore, reduced VAT rates could also be applied to those formats in order to facilitate access to books, newspapers and periodicals for persons who are blind, visually impaired or otherwise print-disabled.

    Towards a better coordinated regime: Members noted that the flexibility granted to Member States in the context of the current proposal in no way prejudges the definitive VAT regime to be rolled out and shall not remove the need for a more coordinated, efficient and simpler system of reduced VAT rates with fewer exceptions.

    Follow-up: three years following the entry into force of the Directive, the Commission shall produce a report identifying the Member States that have adopted similar reduced or super-reduced VAT rates for books, newspapers and periodicals and their electronic equivalent, and evaluate the impact of those measures in terms of budgetary implications and development of the cultural sector.

    The amended text refers to a resolution of 13 October 2011 in which the European Parliament recalled that one of the key features of VAT is the principle of neutrality and, for that reason, it argued that ‘all books, newspapers and magazines, regardless of format, should be treated in exactly the same way’.

activities/5/docs
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  • The Committee on Economic and Monetary Affairs adopted, in line with the consultation procedure, the report by Tom VANDENKENDELAERE (EPP, BE) on the proposal for a Council directive amending Directive 2006/112/EC, as regards rates of value added tax applied to books, newspapers and periodicals.

    The committee approved the Commission proposal subject to the following amendments:

    Subject matter: Members stated that the Directive shall aim at simpler, more fraud-proof and business-friendly VAT systems across the Member States, as well as keeping pace with today's digital and mobile economy.

    Scope of the Directive: the Commission shall clarify whether the proposed Directive also applies to brochures, leaflets and similar printed matter, children’s picture, drawing or colouring books, music printed or in manuscript form, maps and hydrographic or similar charts.

    Towards a better coordinated regime: Members noted that the flexibility granted to Member States in the context of the current proposal in no way prejudges the definitive VAT regime to be rolled out and shall not remove the need for a more coordinated, efficient and simpler system of reduced VAT rates with fewer exceptions.

    Follow-up: three years following the entry into force of the Directive, the Commission shall produce a report identifying the Member States that have adopted similar reduced or super-reduced VAT rates for books, newspapers and periodicals and their electronic equivalent, and evaluate the impact of those measures in terms of budgetary implications and development of the cultural sector.

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Briefing
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  • PURPOSE: to authorise the Member States to reduce the rates of value added tax applied to books, newspapers and periodicals.

    PROPOSED ACT: Council Directive.

    ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting the European Parliament but without being obliged to follow its opinion.

    BACKGROUND: Council Directive 2006/112/EC provides that Member States may apply reduced rates of value added tax (VAT) to publications on any means of physical support. However, a reduced VAT rate cannot be applied to electronically supplied publications, which have to be taxed at the standard VAT rate. In line with the Commission's Digital Single Market Strategy and in order to keep abreast of technological progress in a digital economy, Member States should be enabled to align the VAT rates for electronically supplied publications with lower VAT rates for publications on any means of physical support (minimum 15%).

    In the Action Plan on VAT, the current rules on VAT rates do not fully take into account technological and economic developments with regard to e-books and electronic newspapers. It outlined that electronically supplied publications should be able to benefit from the same preferential VAT rate treatment as publications on any means of physical support.

    Modernising VAT for the digital economy is also a key objective of the Digital Single Market Strategy.

    IMPACT ASSESSMENT: the preferred option is the one which would enable Member States to apply reduced VAT rates lower than the current minimum of 5% or to grant exemptions with deductibility of the VAT paid at the preceding stage to the supply of publications, both on any means of physical support or electronically supplied.

    It is estimated that this option could lead to a maximum decrease of VAT revenues for Member States by 2021 by EUR 4.7 billion annually, if all Member States decided to apply the current VAT rates for printed publications as well to e-publications.

    CONTENT: the Commission is proposing to amend the VAT Directive in order to grant all Member States, the possibility to apply the same VAT rates to electronically supplied publications as Member States currently apply to printed publications, which include reduced (minimum 5%), super-reduced (less than 5%) and zero rates. 

    The supply of pure music and video content would continue to be taxed at the standard VAT rate, as would publications that predominantly consist of music and video content. Member States would have the discretion to specify the term "predominantly" in their national VAT law. This solution would also allow Member States to continue to apply a reduced rate for audio books, audio newspapers and periodicals for people with sight loss.

activities
  • date: 2016-12-01T00:00:00 docs: url: http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/com/2016/0758/COM_COM(2016)0758_EN.pdf celexid: CELEX:52016PC0758:EN type: Legislative proposal published title: COM(2016)0758 body: EC type: Legislative proposal published commission:
committees
  • body: EP responsible: False committee_full: Culture and Education committee: CULT
  • body: EP responsible: True committee_full: Economic and Monetary Affairs committee: ECON
  • body: EP responsible: False committee_full: Internal Market and Consumer Protection committee: IMCO
  • body: EP responsible: False committee_full: Legal Affairs committee: JURI
links
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    Amending Directive 2006/112/EC
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    Value added tax (VAT): rates applied to books, newspapers and periodicals
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