Last week Malgorzata Cyndecka and Tim Wyndham of BECCLE met with representatives of the EFTA Surveillance Authority and the European Commission and presented their findings regarding the Authority’s state aid decision on zero VAT rate for electronic news services.
In January 2016, by decision 023/16/COL, the Authority declared that zero VAT rate for electronic news services in Norway is compatible with the internal market.
The European Commission, on its part, has recently launched a VAT Action Plan that sets out immediate and urgent needs to tackle the VAT gap and to adapt the VAT system to the digital economy and the needs of SMEs. The plan provides a clear orientation towards a robust VAT area in relation to the definitive VAT system for cross-border supplies and proposes options for a modernised policy on EU rules governing VAT rates. One of the main changes that were proposed is introducing a zero VAT rate on electronic news. The current Directive on the common system of value added tax allow for lowered VAT rates for printed news only. A similar distinction applies between printed books and e-books.
Through their presentation ‘Price-increasing tax reductions for electronic newspapers: Implications for State aid policy’, Cyndecka and Wyndham discussed the economic and legal implications of recent development in the economic theory of two sided markets. The discussion was active and will prove useful for future versions of their working paper. This work is an example of economists and lawyers working together in the field of Competition and State Aid Law at BECCLE.
Price-increasing tax reductions for electronic newspapers: Implications for State aid policy
- ESA decision 023/16/COL, 05.01.2016, raising no objections to a zero VAT rate for electronic news services
- Communication from the Commission COM(2016) 148 final, 07.04.2015, on an action plan on VAT: Towards a single EU VAT area – Time to decide
- Council Directive 2006/112/EC, 28.11.2006, on the common system of value added tax