European Pop Stars Urge Reduction Of VAT On CD Sales

by Ulrika Lomas, Tax-News.com, Brussels

05 June 2003

Hundreds of recording artists from across the European Union have joined forces in a campaign to persuade the EU to reduce the rate of Value Added Tax (VAT) on CDs.

Big name stars such as Elton John were among the 1,200 artists to put their names to a petition presented to the European Commission in Brussels earlier this week. They argue that CDs are unfairly discriminated against by EU VAT rules, as other media and entertainment products such as books, newspapers and theatre tickets attract a much lower rate of tax.

The grievances of the artists were summed up by Alex Callier, of Belgian act 'Hooverphonic', who presented the petition to lawmakers along with German singer Rolf Zuckowski.

"When someone buys a biography of Jacques Brel in Belgium he pays a VAT rate of 6%, but if he buys a CD of his music he has to pay 21%. "This makes no sense and does not recognise the cultural role of musical artists," Callier commented, according to a BBC report.

At present, VAT rates on compact discs range from 15% in Luxembourg to 25% in Sweden and Denmark. In the UK, where the rate is 17.5%, the British Phonographic Industry (BPI) has found that sales of CDs have fallen by 4%, which represents the largest fall since the media was introduced some twenty years ago.

Although the European Commission has not yet made an announcement on this specific issue, European VAT laws are currently undergoing a review in an attempt to simplify the vastly complicated system brought about by differing rules in the 15 separate member states.

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