Written answers

Tuesday, 19 November 2013

Photo of Colm KeaveneyColm Keaveney (Galway East, Independent)
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166. To ask the Minister for Finance if his attention has been drawn to the fact that when printed matter is purchased and downloaded via the Internet it is considered to be a service within the meaning of electronically supplied services in the Fourth Schedule to the VAT Act, 1972 (as amended); in view of the fact that this has the effect of discouraging the use of e-books by schools in place of printed books, if he will consider altering the aforementioned Schedule so that e-books would no longer be considered a service and instead be zero rated as with printed material; if he will consider a derogation for education ebooks in this manner; and if he will make a statement on the matter. [48889/13]

Photo of Michael NoonanMichael 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. The different VAT treatment of printed books and e-books reflects the nature of these products, the latter being a richer product often providing content beyond simple text to include embedded digital music, software, film and internet links. There is no option under EU VAT law to exempt e-books from VAT or to apply a zero or reduced rate to them.

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