Czech Republic Delays e-Book Tax Break for EU

June 20, 2017 Taxation in EU

tax breaks on e-booksBRUSSELS – Taxpayers in the EU will not be able to enjoy a tax-break on e-books until the Czech Republic lets go of a bill it is holding hostage for its own political benefit.

Late last week tensions arose among members of the EU, as the Czech Republic blocked a bill relating the taxation of e-books, as a means of lending more weight to their demands on a separate bill on a proposed VAT pilot program.

The blocked bill is intended to allow EU member countries to introduce VAT breaks for the sale of e-books.

Currently, under EU law it is possible to reduce the rate of VAT on physical books, but the breaks are not extended to their digital counterparts, creating a divide between the taxation of physical and digital books.

The Czech Republic has blocked the bill at its last stage before implementation, in order to obtain some leverage for its bill to allow the national tax authorities to run a VAT test program.

The Czech Republic hopes to run a 10-year program to collect VAT only at the last point of sale, as opposed to the current EY-wide system of collecting VAT over the course of the supply chain.

The EU granted permission to the Czech Republic to runs its test program for a period of 5 years, however, the Czech Republic is holding out for a 10 year period.