WRITTEN QUESTION E-1553/02 by Roberta Angelilli (UEN) to the Commission. Taxation of music CDs.
Date: 2002-06-03
Institutions: European Parliament, Provisional data
Subjects: VAT, music, record

C 28 E/120

Official Journal of the European Union

EN

6.2.2003

the Commission intends to draw up a proposal to cover both monitoring and
As a consequence,
mitigation of by-catch at the Community level in an efficient and proportionate manner. This proposal will
be made on the basis of scientific details that will become available before this summer. The Parliament
will be consulted on this proposal.

(1) SEC(2002) 376.
(2) OJ L 206, 22.7.1992.

(2003/C 28 E/134)

WRITTEN QUESTION E-1553/02

by Roberta Angelilli (UEN) to the Commission

(3 June 2002)

Subject: Taxation of music CDs

For some years now in Italy the rate of VAT on ‘intellectual works’ such as books has been 4 %, rather than
the general rate of 20 % which applies to all other goods, the aim being to protect such ‘works of
intellectual production’. However, if books and magazines are considered ‘cultural goods’, this is not the
case for music CDs and cassettes or CD-ROMs, which are considered ‘luxury goods’ and are therefore
subject to the 20 % VAT rate. This presupposes that words automatically become a product of major
cultural importance as soon as they are written down on paper. In addition, certain CDs qualify for the 4 %
VAT rate simply because they are sold in a joint package with magazines at newspaper kiosks. It is
obvious that a lower rate of VAT on CDs would create a remarkable development opportunity for
undertakings in that sector, especially given their problems in the face of the current Europe-wide CD
pirating epidemic. To give CDs and other forms of musical reproduction the status of intellectual products
would also be a suitable gesture of recognition for an important industry which must be considered part of
the cultural production sector.

Can the Commission state whether any studies or documents exist or are in preparation on the possibility
of reducing taxation rates on musical products and bringing those rates into line with those applying to
books?

Answer given by Mr Bolkestein on behalf of the Commission

(10 July 2002)

In accordance with the Community legislation concerning VAT rates at present in force, and in particular
Article 12 of the sixth VAT Directive 77/388/EEC (1), the standard rate applies as a rule to all taxable
transactions.

Member States who so wish may nevertheless apply a reduced rate of not less than 5 % of the taxable
amount, but solely for goods and services in the categories included in Annex H of the above Directive.
Books, newspapers and periodicals are covered by this Annex, but not CDs, cassettes or CD-ROMs.

Some provisions of this same Directive derogate from these rules (Article 28(2)) and allow the Member
States to continue applying a lower rate than the minimum rate of 5 %, under certain conditions, during
the period of application of the transitional arrangements. Such a rate had to be in force already on
1 January 1991. That is how Italy managed to maintain a rate of 4 % on books.

Owing to the dangers of distortions in competition, the scope of these temporary derogations cannot be
extended. Consequently, the only possibility which could reasonably be envisaged would be to extend the
scope of the reduced rates in order to include these cultural goods. This question of extending the scope of
the reduced rates to other goods forms part of the more general revision of certain aspects of the
arrangements, scheduled for 2003.

(1) OJ L 145, 13.6.1977; Directive last amended by Council Directive 2002/38/EC of 7 May 2002, OJ L 128,

15.5.2002.