The French government has updated the Tax Code to reduce the VAT rate on digital news and journals from the standard 20% rate to the reduced rate of 2.1%. This puts digital news on a par with printed newspapers and magazines.
This change is in line with the application of the French reduced VAT rate to e-books. The European Commission has challenged France on the issue of the application of the reduced VAT rate to e-books as it believes this is contravention of the EU VAT Directive. The Directive permits a derogation on reduced rates for printed reading/books/news etc but this was never extended to digital versions. Countries such as the UK and Germany have challenged this, and the European Court of Justice is to have a hearing from a referral from the European Commission at the end of last year in respect of VAT rates applied by France and Luxembourg.
The new rate applies from 1 February 2014 as per the revised Article 298 of the French Tax Code. To qualify for the reduced rate, a publication must be officially recognised by the Commission Paritaire des Publications et Agences de Presse, which sets a long list of qualifying criteria for newspapers. The reduced VAT rate will also apply to approved technical journals, provided that the journal retains editorial independence from single sponsors.
