Reduced VAT rate for online publications
After an earlier proposal to this extend has been blocked three times by the Czech Republic, today (October 2, 2018) it has finally been adopted; EU Member States may apply the reduced VAT rate to digital books and magazines that are not on a physical medium. Until 2010, only physical (paper) books and magazines were taxed at the reduced rate, and since 2010 also digital versions as long as they are on a physical medium. However, in 2010 the digital carrier was already outdated, and nowadays has almost completely disappeared as a carrier for digital publications. But on downloads (such as ebooks and the newspaper on your tablet) or online reading, the general VAT rate was still applicable. Today it was finally decided that these products may also fall under the reduced rate.
Dutch Minister Hoekstra of Finance already wrote to the House of Representatives last week: "The government is in favor of the equal treatment of digital and physical publications. I would like to arrange this quickly, but I am also in favor of an orderly process. This process includes coordination with the sector and with the Minister of Education, Culture and Science.”
We do not yet have complete clarity about content and introduction date of the proposed change. However, last year a bill was already drafted and was already ready for implementation in the Tax Bill for 2018. Due to the blockades of the Czech Republic, this text did not end up in that Tax Bill eventually.
Whether or not implementation will be achieved for 1 January 2019 is still the question. Normally the tax authorities need at least 3 months to implement a rate change like this. But given the proposed VAT rate increase from 6% to 9% and the fact that this is not a completely new provision, but only an extension of it, it is not inconceivable that we will enter the new year with cheaper digital publications!