Part-way through next week, the European Commission will unveil a series of measures to improve VAT schemes for online trading, including measures for publishers of electronic books.
One of the key measures is the option to be granted to the member states to introduce reduced-rate VAT for e-books (see EUROPE 11318). At present, most member states (apart from Bulgaria and Denmark) apply reduced-rate or zero VAT to paper books. A few years ago, France and then Luxembourg decided to do the same for e-books before the practice was ruled unlawful by the European Court of Justice in 2013 (see EUROPE 11268). The new proposal, which is expected to be confirmed in wider VAT proposals to be unveiled in 2017, will state that the member states have power to decide on the matter.
The legislative proposal will suggest four key approaches: (1) replacing the mini-one-stop shop that allowed companies to register in a single member state with a bigger one-stop-shop that will also cover tangible goods; (2) simplifying the rules by introducing a cap of €10,000 for companies to be allowed to continue to apply national rules and to reduce the number of items of proof to be provided by companies from two to one; (3) facilitating cooperation among the various tax offices by designating the tax office of the country where a company is registered as the one responsible for carrying out investigations; and (4) reinforcing anti-fraud measures.
According to Commission data, the VAT system for e-commerce is costly and companies operating online spend nearly €8,000 complying with legislation of the countries where they do business online. (Original version in French by Sophie Petitjean)