VAT rules have become more complex since the EU altered them to take into
account e-commerce. The statement by the publisher is, as far as I know,
correct for business to business sales where both are VAT registered
organisations. Things become more interesting for business to consumer sales
or sales to non-VAT registered organisations - these could potentially
include schools,colleges and universities. Consumers and non-registered
businesses are now liable for VAT at the rates prevailing in the supplier's
country rather than the consumer's, unlike other products and services where
the VAT in the consumer country generally applies. Whether these rules make
it more difficult for the EU to permit digital publications to have the same
rate of VAT as print is, I think, another matter but both statements here
are essentially correct and compatible as far as I know.

Interestingly this is not the argument the UK Treasury and the EU officials
use to me when I discuss the possibility of a level playing field as far as
VAT is concerned with both print and electronic journals being taxed at the
zero rate or the same as print in other EU countries. Their first line of
defence is that it is impossible to distinguish electronic journals, books
etc from other digitally delivered services such as music, film, software
etc etc, and many e-products are now not simply an electronic counterpart of
a printed product but in fact include far more than print and still images.
So they maintain e-books and journals etc should be classed as services, not
specifically included in the allowed list of exceptions, and continue to
attract the standard rate of VAT regardless of the difficulty this gives the
research and educational communities. I disagree with them but regrettably
they seem to hold most of the power at present! However I will continue to
work towards this goal of a level playing field on VAT for Europe together
with the other members of the Frankfurt Group (publishers, libraries, agents
and intermediaries, consortia, authors etc) see
http://www.sub.uni-goettingen.de/frankfurtgroup/ for more about this group.

Rollo Turner
Secretary General
Association of Subscription Agents and Intermediaries
10 Lime Avenue
High Wycombe
Bucks HP11 1DP
UK
www.subscription-agents.org
Tel 01494 534778
[log in to unmask]


----- Original Message -----
From: "M.Yamaguchi" <[log in to unmask]>
To: <[log in to unmask]>
Sent: Tuesday, November 09, 2004 11:58 AM
Subject: VAT on electronic publications


> I saw the following statement on the web site of a British publisher
> about subscriptions to access the archive of its e-journals.
>
> "All EU subscribers, with the exception of UK subscribers, are exempt
> from Value Added Tax (VAT) if they provide their VAT/TVA/Mwst, etc.
> number when placing an order. EU subscribers outside the UK not
> providing their VAT/TVA/Mwst, etc. number will be subject to VAT at the
> prevailing UK rate."
>
> Presumably this is because subscribers are expected to make arrangements
> in their own country to pay VAT, as we do with e-journal payments on
> invoices originating from outside the UK.
>
> I was therefore a little puzzled to read the following in the
> Government's response to the Science and Technology Select Committee
> report on the question of VAT on electronic publications.
>
> "The current rules for determining in which Member State VAT is due on
> digital publications, and their mode of delivery also makes them
> inappropriate for inclusion in the list of permitted reduced rates. This
> is because the VAT is paid to the Member State where the publisher is
> legally established rather than where they are purchased."
>
>
http://www.publications.parliament.uk/pa/cm200304/cmselect/cmsctech/1200/120006.htm#a1
> [Government response to Select Committee recommendations 29 & 30]
>
> Does this mean that the HM Customs and Excise is collecting VAT at the
> rate determined by the UK Government to be passsed on to the Dutch or
> German government for accessing e-journals from publishers based in
> these EU countries? How about publishers outside the EU?
>
> The statement that "the VAT is paid to the Member State where the
> publisher is legally established rather than where they are purchased"
> seems to be at a variance with my understanding of how VAT operates, or
> am I missing something completely? Or perhaps e-journal publishers keep
> offices in all EU countries for VAT purposes?
>
> Mieko
> -----
> Mieko Yamaguchi [log in to unmask]
> Technical Services Manager/System Coordinator +44 (0)1248 382970
> Main Library, University of Wales Bangor, UK +44 (0)1248 382979 (Fax)
>