Sales of e-books and the VAT rate

Service-Tax

Today, traditional printed books are increasingly being replaced by electronic readers. E-book sales are growing. Sellers of electronic books constantly face a number of obstacles. You can read more about it in the article below!

Sales of printed books taxed at a reduced VAT rate

The goods listed in Annex 10 to the VAT Act were subject to a preferential 5% VAT rate. In accordance with the cited appendix, the reduced rate was applied to the sale of:

  • printed books - these are only books (marked with ISBN symbols used on the basis of separate regulations), as well as maps - produced by printing methods, with the exception of leaflets, editions in Braille,

  • books published on disks, tapes and other media marked with ISBN symbols used on the basis of separate regulations,

  • specialist journals,

  • sheet music in printed form.

In this regard, EU legislation should also be examined. Because under Art. 98 sec. 2 of Council Directive 2008/8 / EC of February 12, 2008, amending Directive 2006/112 / EC, as regards the place of supply of services, the reduced rates do not apply to electronically supplied services.

Important!

According to EU regulations, electronic services include services provided via the Internet or an electronic network, the provision of which - due to their nature - is generally automated and requires minimal human participation, and cannot be performed without the use of information technology. This category includes services that provide images, text and information, and the provision of databases, including the content of digital books and other electronic publications.

Sales of e-books - what is the VAT rate?

It should be noted that the preferential VAT rate does not apply to the sale of books in the form of e-books. Because according to EU regulations and the position of the Court of Justice of the European Union, e-books are not a commodity but an electronic service. Thus, the sale of e-books is subject to the basic VAT rate of 23%.

The work of the European Commission is currently underway, which would allow e-books to be subject to reduced VAT rates. The commission is expected to present a preliminary draft in early 2016.

Sales of e-books and the cash register

Entrepreneurs selling to natural persons who do not conduct business activity and flat-rate farmers should remember that such sales, as a rule, should be recorded at the cash register. Selling e-books is no different.

Certain exceptions have been established from the above rule. Namely, in some situations, taxpayers may benefit from the exemption from the obligation to keep records with the use of cash registers. One of such exemptions is the case when the trade in e-books for private individuals and flat-rate farmers did not exceed PLN 20,000 in the previous tax year (this is the so-called subjective exemption). However, after exceeding this amount, the taxpayer will be obliged to purchase a cash register.

The second exception is the sale of e-books to private persons (or flat-rate farmers), if the service provider always receives payment for the service provided via a bank, post office or cooperative savings and credit union directly to the account. However, remember to keep accurate sales records that will allow you to identify individual transactions. The form of recording may be a bank statement, as long as it contains the necessary information identifying the buyer and the service.