So six years after EU members were punished for lowering the tax they collect on the sale of an ebook in violation of EU rules, the European Union decided that this wasn’t such a terrible idea after all.
European Union finance ministers decided on Tuesday to allow lower sales taxes on e-books and other digital publications and to align them to reduced levies applied to paper versions of books and magazines. The deal will allow EU states to apply reduced or even zero VAT rates to electronic publications, which are currently taxed at a minimum of 15 percent because they are treated as electronic services.
“This proposal is part of our efforts to modernize VAT for the digital economy, and enables us to keep pace with technological progress,” said Austrian Finance Minister Hartwig Loeger, who chaired the meeting.
The agreement comes after more than two years of talks after a European Commission proposal. The European Parliament supported the plan a year ago.
While it is good that the EU is finally catching up with the market, let’s not forget that it only took them 18 years to reach the conclusion that ebooks should be taxed the same as print books.
Remember, Amazon may have jump started the ebook market in 2007, but the ebook market really got its start in 2000. Many of us had been buying ebooks for years before the Kindle came along, and some had been paying an unreasonably high tax for the privilege.
Okay, things weren’t so bad in the early years before regulators was paying attention, and Europeans could duck paying VAT by buying from US ebook retailers. That doesn’t change the fact that the EU’s tax rules made no sense, and that it took 18 years to change those rules.
It’s almost as if the EU is being run by Vogons.