Tag Archives: VAT

Going to Internet World 2012 in London

Here is the big announcement – I have managed to snatch the last speaker spot at the Internet World 2012 taking place in London next week (24 – 26 April 2012). I will be speaking at the free for all seminar on Thursday, 26 April 2012, as part of the Digital Solutions Theater. The workshop starts at 3 PM London time and should last 20 min. This is perfect – I will be speaking about “VAT and Monetisation” after all and my guess is that if I speak a minute longer everybody will be running out of the hall (through fire exits or jumping out of the windows if necessary).
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New B2C 2015 EU VAT rules for eservices

In 2015 all European countries will charge VAT on all eservices provided to their residents no matter where the eservice provider will be located (i.e. in Europe, America, Asia or elsewhere). This will be the result of the new B2C VAT rules and the technology which will enable to enforce these new rules. The VAT taxation will lead to increased sales prices of digital products (by as much as 27%) and/or decreased the profit margin for the e-businesses. In addition compliance and admin costs will increase as a result of increased tax compliance and reporting procedures. All this will directly impact the profit line. Alternative is even worse – e-businesses not willing to register and charge VAT will be shut out of the European market.
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EU: What is the correct VAT rate for e-books?

The Luxembourg VAT Authorities have issued a Circular stating that no distinction should be made between books on physical and electronic means, meaning that the super-reduced 3% rate already applicable to books should also apply to e-books. The Circular is effective as of 1.1.2012 (read more). It seems to us that Luxembourg has adopted this position as a response to France’s recent decision to adopt the reduced rate of 7% for e-books published by companies based in France (read more), even though Luxembourg officials claim that it is based on the content of the “Green paper” on future of the EU VAT system, which is actually aiming to plot the  future of the EU VAT system (and not current VAT legislation).
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EU: Internet sellers are jointly liable for import duties

The European Court of Justice (ECJ) has recently passed a decision in a Case C‑454/10 Oliver Jestel regarding the question of who is liable for the payment of customs duties when goods are imported into the EU. The case involved an Online shop within the EU, where the shop owner was acting as an intermediary between the fraudulent seller and the customers. ECJ has essentially deemed that the shop owner is co-liable for the payment of the costumes duties and import VAT, which should have been paid (but were not) be the foreign seller, as the shop owner should have been aware that the seller is selling goods illegally imported into the EU.
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France: Proposed increase of the reduced VAT rate to 7%

The French Prime Minister announced recently that from 1 January 2012 the reduced VAT rate for “standard reduced articles” is expected to be increased from 5.5% to 7% (subject to Parliamentary approval). This change will affect among others also the sales of all e-books in France; as we have reported previously France intends to sell the e-books at reduce rate as of 1 January 2012.
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EU: VAT treatment of digital newspapers vs. their paper version

The European Parliament has in September 2011 published answers to questions of the European Parliament concerning the VAT rate of on-line newspapers and magazines. They have addressed the issue that the digital version of newspapers and magazines is taxed at the higher VAT rate then their paper version although the content is more or less the same.  This is one of the items which should be further discussed and addressed in the intended reform of the EU VAT system.
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France: VAT reduced on e-books as of 1 January 2012

As of 1 January 2012 e-books sold in France will be cheaper due to a lower VAT rate. They will be taxed with 5.5% instead of 19.6%. This will make the France the cheapest country to sell e-books in the whole EU. It might be interesting for e-publishing companies to consider to relocate their e-book stores to France to benefit from the low VAT rate for their EU wide e-book sales.

According to new article 278 bis 6° of the French Tax Code (implementation of article 98.2 of the VAT Directive EC/112/2006), the French VAT reduced rate at 5.5% is applicable to books, whatever their physical support and including books provided by electronic means. This new provision will be applicable in France to all transaction for which the tax point occurs as from 1 January 2012.
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