Ondrej Holzman E-books cannot be treated in the same way as traditional books for value added tax. Today, the European Court issued a decision that e-books cannot be favored with a lower VAT rate. But this situation could soon change.
According to the decision of the European Court, a lower VAT rate can only be used for the delivery of books on physical media, and although a media (tablet, computer, etc.) is also necessary to read electronic books, it is not part of an e-book, and therefore it cannot be subject to a reduced tax rate added values apply.
In addition to e-books, the lower tax rate cannot be applied to any other electronically provided services. According to the EU directive, the reduced VAT rate applies only to goods.
In the Czech Republic, since the beginning of this year, the value added tax on printed books has been reduced from 15 to 10 percent, which is the newly established, second reduced rate. However, 21% VAT still applies to electronic books.
However, the European Court dealt mainly with the cases of France and Luxembourg, as these countries applied a reduced tax rate to electronic books until now. Since 2012, there was a 5,5% tax on e-books in France, only 3% in Luxembourg, i.e. the same as for paper books.
In 2013, the European Commission sued both countries for violating EU tax laws, and the court has now ruled in their favor. France has to apply a new 20 percent and Luxembourg 17 percent VAT on e-books.
However, Luxembourg's finance minister has already signaled that he will try to push for changes to European tax laws. "Luxembourg is of the opinion that users should be able to buy books at the same tax rate, whether they buy online or in a bookstore," the minister said.
The French Minister of Culture, Fleur Pellerin, also expressed herself in the same spirit: "We will continue to promote the so-called technological neutrality, which means the same taxation of books, regardless of whether they are paper or electronic."
The European Commission has already indicated that it could lean towards this option in the future and change the tax laws.
So it seems very strange to me - the reduced rate is perhaps due to the fact that the book is a spreader of education and as such is given a preferential tax rate. And it is completely irrelevant if it is on paper or in a reader.
On the other hand, for a printed book there are costs for printing, binding, commission to the publisher, etc., the author himself can have a commission of about 5% from one book, while the rest are costs (I know several authors from whom I have this information). As far as I know, the e-book does not have these costs, or rather it has minimal costs compared to a standard book (perhaps only the registration fee) and they are also cheaper. Even though printed books will have a reduced tax, they will still be more expensive than the electronic version.
Interestingly, if you look at e-books, they are either as expensive or only slightly cheaper than their paper versions. If you then ask the publishing house, they have a version for customers that the typesetting has to be done all over again, the distribution is laborious and that the material costs are absolutely minimal, therefore there is no difference in the price. But if, as an author, you just want a rate with the fact that you will handle the distribution of the ebook yourself, you will get an answer from them that the distribution costs are minimal, that you will not get a discount. :)