VAT on e-books ‘should go’

UK booksellers have called for VAT on e-books to be scrapped in the week that the European Commission announced the creation of an expert group to explore taxation in the digital economy.

Waterstones managing director James Daunt, Foyles chief executive Sam Husain and The Book People chief executive Seni Glaister have all endorsed the idea that e-books should attract the same 0% VAT as print books, instead of the 20% currently levied on digital titles in the UK.
Removing e-book VAT would provide a level playing field for retailers who are headquartered in the UK, rather than in Luxembourg, which only charges 3% VAT on e-books. Amazon, Kobo and Nook all benefit from the Luxembourg rate.

European booksellers are required by EU law to charge the full standard VAT rate for e-book purchases, but France and Luxembourg broke ranks last year to cut rates to 5.5% and 3% respectively to encourage investment in their digital industries.

Daunt said: “The benefit [of removing VAT on e-books] is that it will equalise pricing and nullify the competitive advantage secured by Amazon, Nook and Kobo through their Luxembourg domicile. Our market share is low, so the realistic benefit is relatively small but no less welcome for that.”

Husain said: “It would make sense for e-books to be categorised as ‘books’ rather than as a digital products, and thus be zero-rated. Foyles has tended to live with this anomaly as the proportion of e-book retail sales is relatively small compared to physical books. I’m sure Foyles would sell more e-books if it was a level playing field on VAT.”

However, Husain added: “In the interests of the consumer, we would also like to avoid a debate on physical books being subject to VAT.”

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Via VAT on e-books 'should go' | The Bookseller.

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