For profane of tax law, the following sentence may seem barbaric, but it is a new benchmark for the value added tax (VAT) in the sector. Within Annex III of Directive 2006/112/EC of the Council of the European Union of November 28, 2006, relating to the common VAT system, point 6 has changed the practice of taxation on certain editorial products. Published in the summer of 2024 in the Official Public Finance – Taxes (Bofip -Impost), he has brought into France the taxation of certain categories of works with a reduced rate VAT (5.5 %) to full -rate VAT (20 %).
Stricter application
Completed the “ventilation” used for holiday notebooks for adults, youth audio booktuses and for a whole series of prints. Without revolutionizing the taxation of the book, this administrative instruction makes the application of VAT at a strict reduced rate. It introduces a new “Recovery practice, in my opinion questionable, on what is not a book in the strict sense”, Support Master Arnaud Morainewhich advises the National Syndicate of Publishing (SNE) as well as several houses. Every year after the adoption of the finance law, the associate lawyer in charge of the VAT team of the Audit and Advice Cabinet KPMG animates a webinar for the members of the SNE. At the beginning of March, he took advantage of this meeting very followed by the publishers to take stock of the taxation of the book.
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As a reminder, a book benefits from a reduced rate VAT, only if it incorporates the tax definition of a book. According to the latest publication of the Bofip-Impôts, a book is considered to be such if it combines these conditions: being a set made up of printed elements, reproducing a work of the mind, not presenting a marked commercial or advertising character and not containing an important space intended to be filled by the reader. Each of the conditions is detailed, such as the concept “Printed elements”, which takes into account audio books and digital books. Another example, the space intended to be filled by the reader must be “At most equal to a third of the total surface of the whole”.
-In practice, certain editorial products remain complex to define. In the case of composite offers, such as a box composed of a book and a promotional object, the publisher has the obligation to sell under a reference and a single price according to article 257 ter of the general tax code. But a vagueness persists on the nature of the product sold: the book – in its legal definition – is it the main nature of this sale or is it the promotional object? Depending on the publisher’s interpretation, a reduced or full VAT rate is applied. In this type of situation, there is no market standard. These waves definitions of the book cause “A strong tax risk for publishers”, Master Moraine analysis. In the event that they adopt a full VAT rate, at 20 %, they are penalized compared to competition. Conversely, if the publishers opt for the application of a reduced rate VAT, they risk a tax adjustment.
Public consultation
In the Solar catalog, some books have had to align with 20 % VAT since last year. These include board games or holiday notebooks for adults. This stricter application of VAT with reduced rate has had an impact on the editor’s margins. To remedy it, the editorial director Didier bears oscillates between two solutions. The first is to negotiate with printers in order to save money on manufacturing. The second is to slightly increase the sale price. An adult vacation notebook sold at 7.50 euros in 2023 went this year to 8.50 euros. “We do not feel an impact on sales because this market is very flourishing”, relativized Didier Ferat. Despite a quick adaptation need last year, the publisher is not at his first time. VAT changes for him? “A phenomenon that spans several years. »»
These developments, Maître Moraine has followed them for almost twenty years. He followed legal changes both on the digital book and on the audio book. The latest administrative comments dedicated to the book are still insufficient for the professional. On behalf of the SNE, the lawyer wishes to request consultation with the public authorities, including the Ministry of Finance. The purpose is to offer a new up -to -date definition of the book which leaves less room for a gray area. “The profession needs legal certainty to adapt to the evolution of the book”, summarizes Maître Moraine.
VAT at 20 %: Does the single price apply?
Maître Moraine replies: “The fiscal definition of the book is not necessarily the same as that of the LANG law. The feedback plan provided for books therefore does not necessarily apply to products that are not books. But nothing prohibits the parties from providing it contractually nevertheless. Conversely, it is not because the administration requires a book with 5.5 % VAT in a product subject to 20 % VAT, that it is no longer a book within the meaning of the Lang law. Products that would not be books within the meaning of the LANG law can be sold at the price that will appeal to the bookseller. But beware, it is not because the tax administration straightens up a product by applying the normal rate rather than the reduced rate of VAT, on the grounds that it would not be a book, that this product still does not remain a book within the meaning of the LANG law. In summary, the fiscal definition is not set on the definition of the LANG law, and vice versa. »»
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