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The European Commission (EC) has published a consultation document on reduced VAT rates, as part of its aim to create a simpler and more efficient sales-tax system in the European Union (EU).
The EC is reviewing as a priority the current rates structure, based on guiding principles:
- Abolition of the reduced rates that constitute an obstacle to the proper functioning of the internal market. Rates justified in the past may now have a distorting effect because of changes to the economic, business and legal environments.
- The end to reduced rates on goods and services the consumption of which is discouraged by other EU policies, especially those harmful to the environment, health and welfare.
- Similar goods and services should be subject to the same VAT rate, and progress in technology should be taken into account in this respect so that the challenge of convergence between online and physical environments is addressed.
A particular area addressed in the new condoc, Review of Existing Legislation on VAT Reduced Rates, is the relationship between printed matter, such as books and magazines, and online publications and ebooks.
Many EU member states apply a reduced or zero rate on books and sometimes audio books, but not on the equivalent electronic products. The consultation is interested in defining ebooks, enewspapers and online publications for EU law.
Comments should be submitted no later than 4 January 2013.
