Whilst checking our bill for dinner at our favourite restaurant in Puerto del Carmen, Lanzarote recently, my husband commented on the 7% ‘tax’ which is added to all restaurant bills there. I immediately launched into an explanation that this was IVA, the Spanish equivalent of our beloved VAT and that back in the UK we are charged the standard rate of 20% for all meals eaten in a restaurant. Fortunately, for his sanity and my continued existence, I noticed pretty quickly that his eyes had glazed over.
I was reminded of this conversation just yesterday when I read that Brussels was targeting VAT on ebooks which could cut the VAT on them. It is an anomaly that whilst printed books are VAT free, ebooks attract VAT at the full standard rate of 20%.
Why should this remind me of my Lanzarote VAT geek moment? Well as I have highlighted before, the VAT treatment of many goods and services differs wildly between EU countries and the treatment of ebooks is just another example. Other EU countries already enjoy lower rates of VAT in respect of ebooks with France taxing both printed and ebooks at 5.5%.
As the French would undoubtedly say ‘vive la difference’.
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