Asked by: Tom Harris (Labour - Glasgow South)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what assessment he has made of the effect on the UK eBook market of the imposition of VAT at 20 per cent.
Answered by David Gauke
The UK applies the standard rate of VAT to digital books and the zero rate of VAT to physical books.
The application of VAT in the EU, including rates and flexibilities afforded to Member States in this regard, is governed by EU law. The sale of a digital book is classified as an electronic service and attracts the standard rate of VAT under EU law.
Legal advice obtained by the Government indicates there is no scope to change the VAT treatment of the sale of digital book and similar products under EU law. As such, no assessments have been made of the type referred to by the honourable Member.
From 1 January 2015, VAT legislation across the EU will change to tax the supply of broadcasting, telecoms and electronically supplied services (including e-books) at the place of consumption.
HMRC has published information on the VAT changes which includes a summary of the impacts:
Asked by: Tom Harris (Labour - Glasgow South)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what steps he is taking to ensure that VAT on eBooks at a standard rate will not damage UK authors and publishers and the UK book sector.
Answered by David Gauke
The UK applies the standard rate of VAT to digital books and the zero rate of VAT to physical books.
The application of VAT in the EU, including rates and flexibilities afforded to Member States in this regard, is governed by EU law. The sale of a digital book is classified as an electronic service and attracts the standard rate of VAT under EU law.
Legal advice obtained by the Government indicates there is no scope to change the VAT treatment of the sale of digital book and similar products under EU law. As such, no assessments have been made of the type referred to by the honourable Member.
From 1 January 2015, VAT legislation across the EU will change to tax the supply of broadcasting, telecoms and electronically supplied services (including e-books) at the place of consumption.
HMRC has published information on the VAT changes which includes a summary of the impacts: