VAT reduction on e-books does not lead to lower prices

In a letter to the House of Representatives dated September 10, 2020, Secretary of State Vijlbrief answers questions about the VAT reduction on e-books that were asked in response to the message Consumers are not aware of lower VAT on e-books .

Level playing field

The State Secretary indicates that the primary aim of the introduction of the reduced VAT rate on electronic publications is to create a level playing field with regard to VAT between physical books, newspapers and magazines and the electronic delivery of their digitized content.

Price reduction

Ideally, according to the State Secretary, this will lead to a price reduction for the consumer. However, companies themselves determine their pricing policy and the government has no instruments to enforce a reduction in the consumer price. Prices could still fall in the coming years.

Usefulness and necessity

In the opinion of the State Secretary, the results of the price measurement by Statistics Netherlands do question the usefulness and necessity of the reduced VAT rate for electronic publications. That is why the State Secretary is advancing the evaluation by one year. This will be implemented in 2022 to assess the effectiveness and efficiency of the reduced VAT rate for books and the like (physical and electronic).

Response sector

In response to the report by Statistics Netherlands on short-term price developments, the State Secretary has also asked the sector to respond substantively to the report.