Dáil Éireann Debate, Tuesday - 23 September 2014
177. Deputy Clare Daly asked the Minister for Finance in view of the European Court of Justice ruling which explicitly makes it clear that member states can set different VAT rates for e-books, the measures he will take to retain the VAT exempt status of printed books; and his plans to abolish VAT on e-books. [35847/14]
View answerThe VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. In this regard, EU VAT law specifically provides that all digitised publications, including e-books, are treated as the supply of a service liable at the standard rate of VAT, which in Ireland is 23%. While Ireland applies a zero VAT rate to printed books including atlases, children's picture, drawing and colouring books and books of music, by virtue of a derogation under the VAT Directive for such exceptional treatment, there is no option under EU VAT Law to either exempt e-books from VAT or to apply the zero VAT rate or a reduced VAT rate to such products.
The different VAT treatment of printed books and e-books reflects the nature of these products, the latter being a richer product often providing content beyond simple text to include embedded digital music, software, film and internet links.
With regard to the recent judgement of the European Court of Justice in Case C-219/13 K Oy, this relates to the VAT treatment of printed vs audio books, that is, books on all physical means of support as defined in point 6 of Annex III to the EU VAT Directive. The Court judged that it is possible for a Member State to apply different VAT rates to printed books and books on CDs or CD-ROMs. E-books are not supplied on a physical means of support and as such are not included in Annex III. EU VAT law makes a distinction between electronic supplies, in this case an audio-book, and electronically supplied services, such as an e-book, and as stated earlier, all electronically supplied services must be applied at the standard VAT rate.
