Re-posted here from Medium for my own archives. Feel free to ignore.
It’s a popular stance among publishers that they and their industry are a gentle sprinkle of special snowflakes and that their software (i.e. ebooks) should be taxed at a lower VAT rate than other software (i.e. websites or any other kind of digital file). They’ve managed to [wrangle several EU member countries to their cause](http://publishingperspectives.com/2015/04/france-germany-italy-poland-call-for-lowering-vat-on-ebooks/):
According to the four ministers, to foster innovation and secure the future of Europe’s e-publishing, technology-neutral regulations must be clearly asserted at the European level. The declaration was signed by France’s Fleur Pellerin, Italy’s Dario Franceschini, Poland’s Malgorzata Omilanowska, and Germany’s Monika Grutters.
The problem is that defining all digital media as services is _exactly_ what a technology-neutral regulation looks like. All digital content has the same VAT. Nobody has clearly outlined how you can define ebooks as special without discriminating against other digital media, other methods of publishing digitally, other digital textual media, or the various kinds of self-publishers. So, how is it supposed to work? Software, ebooks, digital video and audio, and websites are all defined in terms of EU tax law to be digital services. To those who want to lower VAT on ebooks but not on digital media in general, how do you propose to decide which is which? [Pelican Books](https://www.pelicanbooks.com) online ebooks, high VAT service or low VAT ebook? Directly sold PDFs like Amy Hoy’s [JFS](https://unicornfree.com/just-fucking-ship), high VAT service or low VAT ebook? Single book app like Joseph Albers’ [Interaction of Color](https://itunes.apple.com/us/app/interaction-color-by-josef/id664296461?mt=8), high VAT service or low VAT ebook? Literary games and apps like [Frankenstein](https://itunes.apple.com/us/app/frankenstein-for-ipad-iphone/id516047066?mt=8) or [80 Days](https://itunes.apple.com/us/app/80-days/id892812659?mt=8), high VAT service or low VAT ebook? Web-based subscription sold ebooks like digLloyd’s [Advanced Photography](http://diglloyd.com/index-dap.html), high VAT service or low VAT ebook? [Oyster book subscriptions](https://www.oysterbooks.com), high VAT service or low VAT ebook? [Safari Books Online](https://www.safaribooksonline.com) which offers ebooks, audio books, and online video courses, high VAT service or low VAT ebook? Digital audio books, high VAT service or low VAT ebook? An ebook that embeds a video documentary, high VAT service or low VAT ebook? An ebook that is nothing more than annotations on a radio documentary series, high VAT service or low VAT ebook? A non-linear hypertext delivered as a bundle of HTML files in a zip file, high VAT service or low VAT ebook? An image, high VAT service or low VAT ebook? How about a series of images in a zip file with minimal metadata, like a [CBZ](https://en.wikipedia.org/wiki/Comic_Book_Archive_file) comic book, is that a high VAT service or low VAT ebook? If you define low VAT ebooks as a specific file format (epub, mobi, PDF) what about all of the other formats, past present and future? What would the process be to get a format ‘certified’ for lower VAT? Make it too flexible and you might as well lower the VAT across the board. Make it too rigid and you’re killing innovation in digital publishing. If you define low VAT ebooks as text-oriented files sold by specific vendors, how is that not anti-competitive discrimination? How would a vendor or self-publisher get ‘certified’ for lower VAT? If you define low VAT ebooks as those with an ISBN (which in many countries cost money) how is that not anti-competitive discrimination against self-publishing or web-based subscription services offering exactly the same content but in an entirely different format? If you define low VAT ebooks as something other than services — as a virtual pseudo-object unlike all other digital media — how do you propose to handle the licensing that is a mandatory part of today’s ebook retail? (Hint: nobody buys an ebook; we all only get licenses for the ebooks we buy and all of that licensing legalese is based on the concept of ebooks as a service.) What would the buyer’s statutory consumer rights be? Because if you can’t treat ebooks as a service for VAT, you can’t bloody well treat them as a service in terms of consumer rights or licensing. What do you do with what are clearly services (e.g. subscription sites) but deliver ebook formats? What happens when all of the answers to all of these questions end up being different for _each and every_ EU member state? EU VAT is already a complex mess and you want to make it even messier, even harder to deal with, even more difficult for companies and individuals to deal with? How is this idea supposed to work? (Of course, I think a separate and lower ebook VAT is a bad idea even if you do get it to work because it’s fundamentally backwards and reactionary — a de facto state subsidy of a stagnant industry. But that’s an entirely different topic that deserves its own blog post.)