The Spanish government has increased ebook VAT to 21%, more than five times the level of 4% that’s applied to print books. The move comes as Spain’s economy continues to struggle, with unpopular austerity measures being introduced to try to deal with the problems.
Printed books in Spain enjoy preferential status as ‘cultural goods’, which is why their VAT level is only 4%. But the government has now decided that ebooks, as well as many movies and music titles, will be taxed at the higher VAT rate of 21%, a move that some critics argue will slow development of these markets.
Spain’s decision to increase ebook VAT comes as the EU considers how best to deal with digital publishing in general. There are calls for an EU-wide ruling on ebook VAT, but in the meantime countries are setting their own rates at various levels.