Strange politics don’t surprise us anymore, but in one of the more peculiar elements of the EU’s regulations, ebooks until now have been classified not as books but as electronic services in EU countries. This has meant that ebooks could not be given the same low-tax status of print books in member states of the union. So profoundly disliked was this illogical policy that the “A Book Is a Book!” campaign arose in several countries to mock the idea that an ebook is something other than a book.
After years of objections and challenges in many countries (France, Malta, Luxembourg, Italy, Germany, the UK), the European Commission now appears to be firmly on a path to changing its policy. The EC on December 1 issued proposals for new tax regulations; a press release explains that a new provision will “enable member states to apply the same VAT rate to e-publications such as ebooks and online newspapers as for their printed equivalents, removing provisions that excluded e-publications from the favorable tax treatment allowed for traditional printed publications.”
While the plan must be approved by member states, it’s expected that each country could have the chance to lower its VAT at least to the level at which it taxes print books by mid-2017.
Poland is a good example of where the new policy will have an impact. There, print books are taxed at 5 percent, while ebooks are taxed at 23 percent. And Poland’s ebook sales are growing fast, forecast by retailer Virtualo to hit 42 percent year-over-year. Poland led the way in October 2015 in objecting to the high tax rate on ebooks, with the Polish constitutional court issuing a direct challenge to the EC.
Bottom line: While the news is obviously good, the situation faced by the world’s second-biggest ebook market, the UK, is full of irony. There, ebooks have been taxed at 20 percent, while print books (in an exception negotiated with the EU in 1973) are taxed at zero. Brexit—back to strange politics—will mean that British publishers will be dealing with their own government, not the EU, in trying to get rid of their VAT on ebooks. Publishers Association chief Stephen Lotinga has called VAT on ebooks “a disincentive to reading, education, and learning,” and he tells the Bookseller, “We will of course be speaking to the UK government about trying to ensure that VAT is not applied to any type of book both now and after we exit the EU.”
Jane Friedman has spent her entire career working in the publishing industry, with a focus on business reporting and author education. Established in 2015, her newsletter The Bottom Line provides nuanced market intelligence to thousands of authors and industry professionals; in 2023, she was named Publishing Commentator of the Year by Digital Book World.
Jane’s expertise regularly features in major media outlets such as The New York Times, The Atlantic, NPR, The Today Show, Wired, The Guardian, Fox News, and BBC. Her book, The Business of Being a Writer, Second Edition (The University of Chicago Press), is used as a classroom text by many writing and publishing degree programs. She reaches thousands through speaking engagements and workshops at diverse venues worldwide, including NYU’s Advanced Publishing Institute, Frankfurt Book Fair, and numerous MFA programs.
