Insights News Media Europe welcomes European Commission announcement to modernise VAT in the EU

News Media Europe, the organisation representing and promoting the interests of the modern European news media industry, has welcomed the announcement by the European Commission to present by the end of 2016, a legislative proposal to modernise and simplify VAT for cross-border e-commerce as part of the Digital Single Market Strategy.

This will include a proposal to ensure that e-publications such as digital news media can benefit from the same reduced rates as physical publications.

On 7 April 2016, the Commission adopted an action plan setting out ways to reboot the current EU VAT system to make it simpler, more fraud-proof and business-friendly.  The action plan sets out a pathway to modernise the current EU VAT rules.  This includes key principles for a future single European VAT system, an update to the framework for VAT rates and plans to simplify VAT rules for e-commerce in the context of the Digital Single Market Strategy.

NME supports the Commission in its thinking that different VAT rates between physical and digital goods and services do not reflect today’s realities and that the current VAT rules do not take into account technological and economic developments, which is the case for electronic newspapers, which cannot today benefit from reduced rates available for physical publications.  Further, news media publishers in Europe support the principle of subsidiarity, which will allow EU Member States to implement their own VAT rate policy.  To read the NME press release in full, click here.