German Publishing Firm Presses For VAT Privileges

by Ulrika Lomas, Tax-News.com, Brussels

04 December 2008

Although dismissing the idea of a government rescue package, magazine publisher Gruner and Jahr is, however, urging the German government to consider abolishing value-added tax (VAT) on printing products, in a bid to shelter the publishing industry – and in particular vulnerable small- and medium-sized businesses – from the effects of the global economic storm.

According to Gruner and Jahr’s Chairman Bernd Kundrun, the effects of the international economic crisis will continue to be felt by the media industry, particularly the publishing industry, over the course of the next few years – as a result of its heavy reliance on advertising.

Estimating that revenue derived from advertising will dwindle significantly in 2009, as firms cut back on advertising, Kundrun is appealing to the government to exempt all printing products from VAT, in an attempt to ease the increasing burden facing publishers.

Currently standing at the lower rate of 7%, Gruner and Jahr’s Chairman has suggested that the VAT on printed media be reduced further.

Gruner and Jahr is Europe’s largest magazine publisher, producing popular issues such as ‘Stern’, ‘Brigitte’, and ‘Geo’. Despite admitting plans to merge several of its economic publications, the company nevertheless maintains that it is well placed to weather the on-going storm.

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