New rules on taxation of books and electronic journals entered into force 1 November 2019 The main objective of the amendment of the VAT Act, including the VAT rate matrix, was to order tax rates.
On 1 November 2019 provisions amending the VAT Act came into force. These include, inter alia, a refreshed VAT rate matrix. The new rates that will apply to electronic releases deserve attention. e-books and e-press.
Lower rate for e-books
The issue of reducing the VAT rate on e-books and aligning it with the rate applied to traditional books has already been raised several times by representatives of the publishing market, resulting in electronic books from 1 November are no longer subject to a rate of 23%, but reduced to 5%.
Changes in VAT rates to e-books and e-presses are a good sign for the market of electronic publications in Poland
two lower rates per e-press
It is worth mentioning that VAT on electronic magazines has also changed. E-press from 1 November 2019 has been subject to a rate of 8%, except regional or local journals, and only printed ones are taxed at a rate 5%.
Unclear Audiobook Position
Although the legislator ensures that the rate 5% VAT also applies to audiobooks, these provisions do not necessarily confirm this. Uncertainty is due to the fact that the legislator excluded from a reduced VAT rate publications supplied electronically, which are wholly or mainly composed of video content or music.
It should be noted that the audiobook is a so-called spoken book in which no musical elements may appear. On the other hand, it may happen that the audiobook will contain additional musical elements, whose task will be to diversify the recording.
Changes in the VAT rate to e-books and e-press are a good sign for the market of electronic publishing in Poland. The changes in the rates of VAT on e-books and e-presses were also expected by consumers, who hope that lower VAT will translate into lower prices of these products, which means that reading in Poland increases. Some doubts may arise only as to what rate of VAT should be applied to audiobooks when the audiobook contains additional musical elements trying to emphasize the content of the recording.