Brussels, 18/11/2011 (Agence Europe) - On Thursday 17 November 2011, adopting by 484 to 48 with 56 abstentions a joint resolution of the EPP, S&D and ALDE parties on updating VAT rules to encourage a single market in digital matters, the European Parliament considered “that EU law could allow member states to apply, on a temporary basis, a reduced VAT rate to electronically supplied services with a cultural content”.
The EP considered “that the VAT rates applicable to books illustrate the shortcomings of current legislation in that, while member states may apply reduced VAT rates to the supply of books on all physical media, e-books are subject to a standard rate of no less than 15%; takes the view that this discrimination is untenable, given the potential growth of this segment of the market”.
Catherine Trautmann (S&D, France) said that in the EU 2020 Strategy, the importance of a single market in digital matters is stressed as a means of boosting economic growth in Europe and the European Commission is currently working on the future of VAT. She said that the EUROPE 2020 Strategy should be taken into account in the VAT changes and member states should introduce reduced-rate VAT for all culture in any format. She said the measures set out in the resolution amounted to a culture-led growth model and demonstrated the absurdity of Nicolas Sarkozy's decision to increase the reduced rate of VAT in France, measures that were out of step with the EU's approach. She said it was about time that Sarkozy read La Princesse de Cleves on Kindle.
After the vote, Marielle Gallo (EPP, France) said that the growth potential of the digital economy was well-known and the European Parliament had shown that it has decided to pull out all the stops to help it along. She said the European Commission should end tax the discrimination whereby reduced-rate VAT is levied on physical cultural artefacts but VAT at the full whack applies to online culture. She said the EP wants the reduced-rate of VAT to apply to both types of culture, as the United States has already done, and they dominate the market. She said changing the VAT rules in this way would be of benefit to EU businesses to help them expand their provision of legal online culture by making it cheaper and more accessible, thereby increasing member states' tax revenue while providing a diverse range of culture to consumers. (LC/transl.fl)