Outside ‘the Black Diamond,’ the Schmidt Hammer Lassen extension of the Royal Danish Library in Copenhagen, on a June day. Image – Getty: Chris Farrugia
By Porter Anderson, Editor-in-Chief | @Porter_Anderson
See also:
Slovakia’s Publishers Surprised by a VAT Reduction on Books
Cheers in the Czech Republic for the End of VAT on Books
Sri Lanka: Publishers, Booksellers Oppose a Book Tax Hike
Germany’s Börsenverein Cheers EU Flexibility on VAT Rates for Books
Sonia Draga: ‘This Is Positive for Society as a Whole’
The leadership of the Federation of European Publishers (FEP), based in Brussels, is cheering Denmark’s arrival as what the FEP says is the third European Union member-state to apply zero VAT to the purchase of books. Previously, Brussels says, Czechia and Ireland were the only two EU countries to have removed all value-added tax on books. In the United Kingdom, books are free of VAT, but of course the UK is no longer part of the European bloc.
The publishers’ federation itself had worked since its inception in 1967 as a key lobbying organization, urging the European Commission to become open to the possibility of reduced rates for audiobooks, followed by ebooks.
In late 2021, many in the European book industry were pleased to see ECOFIN’s decision to allow EU member-states “to introduce a greatly reduced VAT rate for certain basic goods or even exempt them from VAT.”
According to the measure adopted by ECOFIN in December 2021, “Books, newspapers, and magazines are among those goods that meet people’s basic needs and can therefore benefit from even greater tax benefits.”
Christine Bødtcher-Hansen, director of Danske Forlag, the Danish Publishers Association, informed FEP’s offices that today (August 20), the Danish minister of culture, Jakob Engel-Schmidt, would announce that the coalition government of Mette Frederiksen had decided to rescind the VAT on books.
Jakob Engel-Schmidt: ‘I’m Incredibly Proud’
In this case, the adjustment is substantive: Copenhagen is ditching a whopping 25-percent sales tax on books, which some reports say is the highest level of VAT levied on books in Europe and perhaps the world. In fact, analyst Alex Mengden in January at Tax Foundation Europe tells Publishing Perspectives that while books in Hungary are taxed at a reduced rate below that country’s general 27 percent VAT, Finland’s 14-percent rate is to be decreased to 13.5 percent in 2026.
“We must put everything at stake if we are to end the reading crisis that has unfortunately been spreading in recent years.”Jakob Engel-Schmidt, Danish culture minister
It’s estimated in news reports that the VAT reform could cost Denmark some 330 million kroner annually (US$34.5 million). Among its brother Nordic states, Sweden has a VAT rate on books at 6 percent. In Norway, print and digital formats of books are actually VAT-free for consumers, but retailers do pay a VAT on books when buying them from suppliers.
What’s prompting the Danish move, as described today by Gabriela Pomeroy for the BBC is a “reading crisis” of alarming proportions.
The Danish culture has much extraordinary literature at the heart of its culture, and yet, Pomeroy reports, the OECD’s figures show that a quarter of the 15-year-olds living today in Denmark—the country of Hans Christian Andersen and Søren Kierkegaard—”cannot read a simple text.”
Jakob Engel-Schmidt
Miranda Bryant, Nordic correspondent to The Guardian, today quotes the culture minister, Engel-Schmidt, saying to the news agency Ritzau, “This is something that I, as minister of culture, have worked for, because I believe that we must put everything at stake if we are to end the reading crisis that has unfortunately been spreading in recent years.
“I’m incredibly proud. It’s not every day that one succeeds in convincing colleagues that such massive money should be spent on investing in the consumption and culture of the Danes.”
Sonia Draga
And Sonia Draga, president of the Federation of European Publishers, says, “For too long, Denmark has been the anti-champion when it came to VAT with its 25 percent on books.
“Today, it announces joining the winning podium with Ireland and Czechia with zero VAT on books.
“I hope that all political leaders in Europe will be encouraged by this decision and ensure that books benefit from the most favorable VAT rates. This is positive for society as a whole; for authors, publishers, booksellers, libraries and of course readers.”
As Czechia has learned, even a zero-VAT rate can’t guarantee a turnaround in reading and book-buying. A contraction in new-title publication there has appeared along with flat sales rate.
Not surprisingly, the federation’s media messaging is that Denmark’s adjustment should be followed as an example, yielding more EU member-states with zero VAT on books. And the Danish readers of Karen Blixen and Inger Christensen, Merete Pryds Helle and Carsten Jensen, Leif Davidsen and Helle Helle, can avoid VAT now when they grab a book for the end of summer’s sunshine at Copenhagen’s Havnebadet Islands Brygge.
Special thanks to Alex Mengden at Tax Foundation Europe.
More from Publishing Perspectives on Europe is here, more on Denmark is here, and more on value-added taxation in publishing is here.
A programming note: The Federation of European Publishers’ president Sonia Draga speaks on September 4 in Lisbon’s Book 2.0 conference at the Champalimaud Foundation complex. More on that conference and its plans is here.
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