September 27, 2016

The News Media Association has stressed the importance of the UK being able to retain a zero rate of VAT on printed newspapers in pursuing any European Commission reform to enable zero rate on digital publishing.

In its submission to the European Commission consultation on reforming VAT on electronic newspapers and books, the NMA said that Member States should be able to apply the same rate of VAT to digital newspapers as they do to print, provided that in the UK context, this means that both would benefit from zero-rating.

The NMA said: “Print and digital versions of newspapers are essentially the same product, delivering the same educational and democratic benefits to society. Zero-rating would enable our members who offer digital subscriptions to make a greater investment in journalism and drive innovation”.

The NMA warned against any attempt to require the UK to “equalise up” the rate on print to a level that is higher than zero, but less than the EU-wide 15% standard rate.  The NMA said: “Print remains the most important product for our members and there is substantial cross-subsidising of digital by print.  Independent studies we have commissioned over the years emphasise the sensitivity of print sales to increases in cover prices.  If VAT goes up, this will push up cover prices, triggering a decline in print sales and depressing the development of the digital side of the business. This would be worse than no reform at all”.

The NMA also advised the European Commission against imposing a statutory definition of “newspaper” for the purposes of any new reform of VAT, warning that any definition the Commission came up with would be “static and vulnerable to becoming outdated at a time of rapid technological upheaval”.

The NMA’s sister association in Europe, News Media Europe, made similar representations in its submission to the Commission, as did the European Publishers Council and the European Newspaper Publishers Association.  To read the NMA’s press release in full, click here.