Nicky McFadden (Longford-Westmeath, Fine Gael)
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To ask the Minister for Finance if he will examine the VAT charge of 23% on the purchase of school books in electronic format in comparison to a 0% VAT charge on paper format schoolbooks (details supplied); if the system will be modified to ensure equity and fairness; and if he will make a statement on the matter. [15172/13]

Michael Noonan (Limerick City, Fine Gael)
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The VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. In Ireland the zero rate applies to printed books, including atlases, children’s picture, drawing and colouring books and books of music. It is possible for Ireland to apply the zero rate to printed books because Ireland applied the zero rate to these books on and before 1 January 1991, and the EU VAT Directive provides a derogation for such exceptional VAT treatment to continue to apply. However, the VAT Directive does not allow goods and services to apply at the zero rate which were not in place at that rate on 1 January 1991. As e-books were not applied at the zero rate in 1991 it is not possible to apply the zero rate to them now.

Furthermore, under the EU VAT Directive, all digitised publications, regardless of their rate when printed (for example, a book liable at zero rate), are treated as the supply of a service liable at the standard rate of VAT, which in Ireland is 23%. E-books, online newspaper subscriptions and online information services purchased via download over the Internet are also considered the supply of services liable for VAT at the standard rate. There is no option under EU VAT law to exempt e-books from VAT or to apply a reduced rate to them. While it is possible to reduce the standard VAT rate on e-books to below 23%, such a reduction would have to apply to all goods and services at the standard VAT rate, which accounts for the majority of activity liable to VAT, and would be excessively costly to the Exchequer.