|Author (Corporate)||Council of the European Union|
|Series Title||Official Journal of the European Union|
|Series Details||L 286|
Directive which amends Directive 2006/112/EC to allow the application by Member States of reduced, super-reduced or zero VAT rates to electronic publications, thereby allowing alignment of VAT rules for electronic and physical publications.
Directive 2006/112/EC on the common system of value added tax (the VAT Directive) initially stated that electronically supplied services (including e-publications) had to be taxed at the standard VAT rate (minimum 15%). On the other hand, Member States had the option to apply a reduced VAT rate (minimum 5%) or even lower than the minimum (super-reduced rates) including exemptions with the deductibility of the VAT paid at the preceding stage (so called zero rates), to certain printed publications.
The European Commission highlighted in its Action Plan on VAT that existing rules on VAT rated did not fully take into account technological and economic developments with regard to e-books and electronic newspapers. Modernising VAT for the digital economy had also become a key objective of the Digital Single Market (DSM) strategy.
In May 2016, the Council of the European Union invited the Commission to put forward a legislative proposal which integrated provisions concerning VAT rates for e-publications in the context of Digital Single Market initiatives by the end of 2016 and to include an impact assessment. The Commission adopted a draft law on 1 December, granting all Member States the possibility to apply the same VAT rates to electronically supplied publications as they currently apply to printed publications. The proposal required unanimity for adoption by the Council, after consultation of the European Parliament. A general approach was agreed on 2 October 2018, leading to the formal adoption on 6 November.
|Subject Tags||Digital Economy, Digital Single Market [DSM], Value Added Tax [VAT]|
|Keywords||Single European VAT Area
|International Organisations||European Union [EU]|