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Why is Europe’s E-books Policy So Schizophrenic?

If e-books are books, just like any other, then why all the furor?

By Edward Nawotka, Editor-in-Chief

VAT on print books and e-books across Europe varies significantly from country to country (see our chart below, in which the UK, with a 20% VAT on e-books is absent). Earlier this month, the European Commission have been issuing notices that seem to be at cross purposes. Yet earlier this month the Commission said it was launching an “infringement procedure” against France (France is currently at 7% on e-books with plans to again reduce it to 5.5%) and Luxemborg (at 3%) for offering lower rates on digital than print titles. This news came only days after top publishers met with the EC, and where Neelie Kroes, the European Commission’s vice president, responsible for Europe’s Digital Agenda, and advocated an open market policy for e-books.

Throughout the past several years the EC has treated e-books like a soap opera, including a “raid” on French publishers in March of last year to investigate price fixing.

The United States has been no better, with the Department of Justice’s case against publishers for collusion in instigating Agency Pricing into a sideshow that does little more than reinforce the false idea in reader’s minds that publishers are “the enemy” and trying to take advantage of them.

If e-books are books, just like any other, then why all the drama?

Of course, it has taken years for many states to force Amazon to comply with local taxation laws, so there’s not likely to be any kind of quick resolution at hand.

Let us know what you think in the comments.

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6 Comments

  1. Nils Bjervig
    Posted July 11, 2012 at 3:49 am | Permalink

    Dear Ed
    I enjoyed our article. But there is one thing you need to change: book prices in Denmark are free, since January 1, 2011.
    Nils Bjervig

  2. Posted July 11, 2012 at 4:31 am | Permalink

    Hi,

    Its actually very simple when you cut through all the legislation as we did last year when setting up Books4Spain -= eBooks are classified by t he EU as an “electronic service” Electronic services are NOT eligible for reduced rate VAT, i.e. full VAT rate must be charged.

    Physical books are products which a reduced rate of VAT are allowed to be levied on.

    Until the EU changes the definition of an eBook lower rate VAT cannot be applied to eBooks in any EU country.

  3. Posted July 11, 2012 at 4:40 am | Permalink

    In the UK, 20% VAT is applied to ebooks. However, the great majority of UK ebooks (over 75%?) are purchased from the Kindle Store in Luxembourg, where they attract 3% VAT. Country of origin is absolute when purchasing a physical book from a bookshop, but decidedly relative in the ethereal world of ebooks.

  4. Posted July 11, 2012 at 7:14 am | Permalink

    Amazon are big boys with good lawyers but I think they are breaking EU law by charging reduced rate VAT on eBooks – we did a lot of research into this with accountants etc. and it was a clear conclusion at the end that eBooks are NOT eligible for reduced rate VAT in EU. So who is going to take Amazon on?

  5. Sarah E.
    Posted July 11, 2012 at 8:28 am | Permalink

    Thank you for this insightful article. Your use of the word ‘schizoprhrenic’ to mean ‘fragmented’, however, borders on ignorant. Many in the mental health advocacy community would find it offensive. Please reconsider using this word in this manner in the future. Thank you.

  6. David
    Posted July 12, 2012 at 4:14 am | Permalink

    It’s not just Europe that this battle is happending. Accounting to this site http://www.tmf-vat.com/tmf-in-the-media/japan-reviews-consumption-tax-vat-on-ebooks.html Japan is to go after Amazon too on its cheap ebooks

    David

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