EU publishers call for VAT harmonisation
Jinfo Blog

By Penny Crossland

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One of the many concerns European publishers voiced after the announcement of Apple’s and Google’s web payment systems was to do with VAT rates. Across Europe, value added tax on web-based publications varies from 15% to 25% in some countries, while printed newspapers benefit from reduced VAT rates. As paidContent reported, some publishers assumed that Apple’s and Google’s cut on articles sold excluded VAT, which would mean handing over an even greater share of revenue. Grossly unfair!, shouted the European Newspaper Publishers Association, and it appears that the EU Commission is listening.

At a debate hosted by the Friends of Europe a few weeks ago, the EU Commissioner for Education & Culture argued that print and online content should be taxed at the same level. The ENPA is strongly advocating a 0% rate for all online and print media. At the very least, it would seem that harmonisation is now on the cards, fuelled by the widespread drop in revenue across the European media sector.

Meanwhile, paidContent has reported that German news website Focus Online is experimenting with Google’s One Pass subscription plan, which keeps 10% of all online revenue. This rate is seen as reasonable by publishers, however now there are fears that Google may increase its cut in the long run, since it has not actually committed to staying with this level of revenue. For now, however, Google is still looking like a better bet for publishers of tablet news content than Apple’s subscription plan.

As if to boost its growing reputation as online journalism’s new best friend, we also learned recently that Google is sponsoring the International Press Institute’s News Innovation Contest to the tune of $2.7 million. The innovation project aims to advance “the future of digital news by funding new ways to inform communities in Europe, Middle East and Africa” and will award grants to digital Open Source ventures created “by journalists or for journalists and distributed in the public interest." As reported by paidContent, Google already gave $2 million to a similar project in the US, the Knight Foundation.

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