Thursday, 7 April 2011
I want to talk about VAT a little bit *watches blog readers' eyes glaze over*
Briefly, books are deemed to be a necessity and therefore attract no VAT.
However, e-books do attract VAT.
The EU took a decision that member states of the EU would decide for themselves at what level to set VAT on e-books, and most member states (such as Spain) instantly took VAT to the same level as on paper books (4% in their case). Does this not then give such territories a competitive advantage over the UK in terms of books being delivered?
But the UK chose not to apply this ruling - which presumes that they feel e-books to be a luxury and not a necessity.
We are still talking about books and reading, though, which are, in my view, a necessity to the health, happiness and education of the English population. Why should the nature of the provision have any effect?
(As to that, it is because downloading is seen as providing a service and not a supply - but is downloading not the future? So many more people are downloading music, films, books, newspapers these days that it seems old-fashioned to still class downloading a service rather than a direct provision of goods).
Here's something for you: pornographic magazines attract no VAT. Electronic textbooks do attract VAT *shrugs shoulders* Something wrong there, surely?
At this point, it strikes me that the e-book market is at a crucial tipping point: more people than ever before are using e-readers, and is this refusal to reduce VAT going to cause issues for a burgeoning market that ought to be encouraged?
Does anyone have any views on this? Do you think that paper books and e-books should be treated in the same manner, to achieve pricing polarity? Do you think there is ever a situation where VAT can be charged on paper books as well?
Did you have any knowledge of this prior to my post? Does it effect the way you look at e-books?