May 6, 2015 / 8:49 PM / 4 years ago

EU aims to cut sales tax on online newspapers - Juncker

European Union flags flutter outside the EU Commission headquarters in Brussels May 5, 2015. REUTERS/Yves Herman

BRUSSELS (Reuters) - The EU executive will propose cutting the bloc’s sales tax on online newspapers, European Commission President Jean-Claude Juncker said on Wednesday, in a move that would bring them into line with print media.

Addressing Germany’s newspaper publishers federation BDZV in Brussels, Juncker said the Commission would put forward draft legislation in the first half of next year to extend national governments’ right to set reduced rates of value-added tax (VAT) on newspapers to their digital versions.

The BDZV is among organisations whose complaints prompted the Commission to charge U.S. tech giant Google with antitrust offences last month. It has also been a force in pressing the EU executive to defend the interests of European content providers in an online market dominated by American corporations.

Two months ago the EU’s highest court ruled that reduced rates of VAT applicable to books could not be applied by states to digital e-books. The Commission, which on Wednesday unveiled plans to encourage online business, is reviewing VAT rules. Juncker told the BDZV that VAT should be “technology-neutral”.

In Germany, printed newspapers are taxed at 7 percent, compared to 19 percent on most other goods. In Britain, papers pay no VAT, while online services are taxed at 20 percent.

Reporting by Tom Koerkemeier; Writing by Alastair Macdonald; Editing by Susan Fenton

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