Thursday, November 30, 2006


Every now and again the dreaded tax question rears its ugly head. Are books different? Should they be subject to tax or be seen as educational, social and generally one of the few things that free from it?

What makes the question worse is the inconsistency of approach by our European neighbours and also the different applied to printed and electronic publications. In Germany, for example, print products are subject to a reduced rate of 7%, whereas electronic publications are taxed at 16 %. Also, unlike the UK, Italy, Spain and Belgium tax electronic publications at the full rate. The whole inconsistency on tax forces results in inconsistency of buying and market strategies. Some major markets remain with a print biased policy not on the grounds of demand but on the grounds of cost. This is without entering into the further murky waters of mixed product, “free” digital additions and formats such as audio.

A study "Survey on the impact of VAT on libraries and the scientific publication markets" for the Frankfurt Group - Consensus Forum for Academic and Research Information is available raises many further interesting perspectives on this thorny issue. In Scandinavian countries, the shift to electronic media in moving faster and more comprehensively as VAT is refunded at the end of the year. However, the report found that the system in Germany and other European countries not only acted as a brake in terms of the provision of digital information, it also represented a considerable disadvantage for research and economic development, including in international competition. It cited the considerable competitive advantage for research and education in the USA where electronic publications are not subject to VAT.

What everyone fears is that VAT or tax will be applied, irrespective of format, to all publishing. It is one of those subjects few want to discuss in case they raise the profile of the issue and their worst nightmares happen. The reality is we now in a digital age and living in a global economy. The issue isn’t going to go away, neither is that of tax harmonization. Believing we will retain the status of no tax forever, may appear to some like King Canute holding back the tide – pointless. Just as believing that all countries will adopt the same tax approach is equally unrealistic. We need to get on with digitization, make the changes needed to publishing and it processes whilst continuing to apply the pressure to retain the status of printed books.

Sociology Research Institute Göttingen (SOFI)

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