Publishers urge lower VAT rates for digital publications

European Newspaper Publishers' Association wants tax on online editions reduced

European newspaper publishers have called for lower value added tax (VAT) rates for digital publications.

Zero and reduced VAT rates are currently applied to print newspapers in many European member states to lower the cost of information for citizens, but standard VAT rates apply to digital editions. The European Newspaper Publishers' Association (ENPA) on Monday called for this discrepancy to be removed and for the European Union VAT system to be updated to take account of technological change. ENPA represents more than 5,200 national, regional and local newspaper titles, published in 23 E.U. member states, plus Norway and Switzerland.

"Extending the existing VAT rates for printed editions to newspapers in all formats would help to achieve the goal of a vibrant European digital market for paid-for content. Providing the lowest possible VAT rate for newspapers on all formats would also promote the role of news media in the education, lifelong learning and media literacy of European citizens," said Francine Cunningham, executive director of ENPA.

VAT was introduced in the E.U. more than 40 years ago, in a very different marketplace, and no longer fits the needs of a service-driven, technology-based, modern economy, according to the European Commission, the E.U.'s executive and regulatory branch.

"We need a VAT system for the 21st century: simple, modern and effective," said Taxation Commissioner Algirdas Šemeta. "VAT is paid by citizens, collected by businesses and is a main source of revenue for member states, so everybody has an interest in this tax."

The European Commission is currently holding an open consultation on VAT with a view to making reforms later this year. The consultation is open until May 31.

Follow Jennifer on Twitter at @BrusselsGeek or email tips and comments to jennifer_baker@idg.com.

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