The EU's Economic and Financial Affairs Council (Ecofin) has agreed to allow all member states to give e-books and audiobooks the same VAT-free status as printed books.
VAT is currently zero-rated on printed books sold in the UK. But an inconsistency in EU law has prevented the Government from extending the same status to e-publications such as audiobooks and e-books. This is now set to change.
The European Commission said the measure would "allow Member States to align the VAT rates they set for e‑publications, currently taxed at the standard rate in most Member States, with the more favourable regime currently in force for traditional printed publications... Today's decision is the final step to ensure that the unequal treatment of the two products - paper versus digital - becomes a thing of the past."
VAT on e-books in the UK is currently charged at the standard rate of 20%. The European Commission’s decision enables the Government to reduce this to 0% in line with printed books, and the Society of Authors is calling on the Chancellor to do this at the earliest opportunity.
Nicola Solomon, Chief Executive of the Society of Authors, said:
“Charging VAT on books amounts to a tax on reading and a tax on knowledge. It is this principle which means that VAT is not charged on printed books in the UK, and it is only fair and consistent that e-books should be treated in the same way.
“Today’s decision by the EU is excellent news and paves the way for the UK Government to abolish VAT on e-books, something we have long campaigned for.
“The Budget later this month provides the Chancellor with the perfect opportunity to scrap such an unjust tax, and we urge him to take swift action.”