November 13, 2018

On 6 November 2018 the Council adopted the e-Publication Directive, which amends Directive (2006/112/EC), to allow for the alignment of VAT rules for electronic and physical publications. Once the Directive comes into force, Member States will be able to apply reduced, super-reduced or zero VAT rates to electronic publications and well as physical publications.

The adoption of the e-Publication Directive follows political agreement reached by the Council on 2 October 2018.

Under the current VAT rules (Directive 2006/112/EC), electronically supplied services are taxed at the standard VAT rate, i.e. a minimum 15%, whereas physical publications may benefit from non-standard rates.

For physical publications (books, newspapers and periodicals), Member States currently have the option of applying a “reduced” VAT rate, i.e. a minimum 5%. Some have been authorised to apply “super-reduced” VAT rates (below 5%) or “zero” rates (which involve VAT deductibility).

The e-Publication Directive will allow Member States that so wish to apply reduced VAT rates to electronic publications as well. Super-reduced and zero rates will only be allowed for those Member States that currently apply them to “physical” publications.

The new rules will apply temporarily, pending the introduction of a new, “definitive” VAT system. The Commission has issued proposals for the new system which would allow Member States more flexibility than at present in setting VAT rates. To read the Council’s news release in full, click here.