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Italy Extends Reduced VAT Rate To All Digital Publications

by Ulrika Lomas, Tax-News.com, Brussels

08 January 2016


A provision within the 2016 Stability (Budget) Law, which took effect on January 1, extends a reduction in Italy's headline 22 percent value added tax (VAT) rate to four percent for all digital publications, and not just for e-books.

Under the new provision, the reduced rate is now applicable to any publication, such as a newspaper, book, or periodical, which is issued by an electronic means and has an IBSN (International Standard Book Number) or ISSN (International Standard Serial Number).

Previously, in the 2015 Stability Law, the extension of the four percent rate, which is already imposed on all printed publications, had only been available for e-books with an IBSN.

The measure is despite the ruling from the European Court of Justice on e-books taxation in March 2015. The Court found that the imposition of a reduced rate on e-books by France and Germany contravened EU law. The Court said a reduced VAT rate can apply only to supplies of goods and services covered by Annex III to the VAT Directive, which refers only to the "supply of books... on all physical means of support."

Although there have been indications since then that the European Commission will be reviewing EU VAT law concerning the taxation of digital media, with the objective of making VAT "technology neutral," no such action has taken place to date.

TAGS: court | tax | European Commission | value added tax (VAT) | commerce | law | internet | e-commerce | legislation | tax rates | Italy | legislation amendments | European Union (EU) | Europe

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