WRITTEN QUESTION E-0833/04 by Catherine Stihler (PSE) to the Commission. VAT rating of 0 % or 5 % on all audio-books.
Date: 2004-03-15
Institutions: European Parliament, Provisional data
Subjects: United Kingdom, VAT rate, derogation from EU law, facilities for people with disabilities, tax harmonisation, tax system

8.4.2004

EN

Official Journal of the European Union

C 88 E/541

Answer given by Mr Patten on behalf of the Commission

(27 April 2004)

The Agadir Agreement signed on 25 February 2004, is a free trade agreement between four Mediterranean
partners: Morocco, Tunisia, Egypt and Jordan. Therefore,
this
Agreement, although it has strongly encouraged its conclusion. Each of these four countries has concluded
Association Agreements, including free trade provisions, with the European Union in the context of the
Euro-Mediterranean partnership. The Agreements with Morocco, Tunisia and Jordan are already in force.
The Agreement with Egypt should enter into force in the near future although its trade and trade related
provisions have been in force since 1 January 2004. The Agadir Agreement should therefore have no
direct effect on sectors in the EU.

the European Union is not part of

so that

the North-South economic dimension of

The policy of the Commission is to promote the conclusion of free trade agreements between Southern
Mediterranean partners,
the Euro-Mediterranean
partnership is complemented with a South-South dimension to further attract investment and promote
trade between partners. The Agadir Agreement, in line with this objective, constitutes a positive step in the
gradual creation of the Euro-Mediterranean Free Trade Area and should have a positive impact in the trade
relations of the four countries concerned, and in the development of economic and trade relations in the
whole Euro-Mediterranean region. The Commission follows very closely the impact and developments
resulting from the implementation of free trade in the region and is funding a sustainability impact study
on the Euro-Mediterranean Free trade Area. The study is in its initial phase, and is intended to produce an
overall evaluation of the economic, social and environment sustainability of free trade in the Euro-
Mediterranean region.

(2004/C 88 E/0553)

WRITTEN QUESTION E-0833/04

by Catherine Stihler (PSE) to the Commission

(15 March 2004)

Subject: VAT rating of 0 % or 5 % on all audio-books

Can the Commission inform me if it would have objections, and if so on what grounds, to the UK
Government applying a reduced VAT rating of 0 % or 5 % on all audio-books? This would bring audio-
books closer into line with the 0-rating on print books in the UK and ensure that people with sight loss
are not penalised for reading books in audio format rather than print format. Such measures have been
supported by the Royal National Institute of the Blind Scotland and other organisations of and for people
with sight loss.

Answer given by Mr Bolkestein on behalf of the Commission

(30 April 2004)

Under present Community legislation, the United Kingdom has no legal base to apply a reduced VAT
rating of 0 % or 5 % on audio-books.

The maintenance of zero rates was authorised by Council Directive 92/77/EEC (1) as a temporary
derogation for the duration of a transitional period prior to the introduction of a definitive VAT system
involving taxation in the country of origin. It is allowed on the condition that such rates were legally in
force on 1 January 1991. Under these provisions, the United Kingdom was allowed to apply zero rates to
books but not to audio books. This sort of derogation is an exception to the normal rules which foresee
that the standard VAT rate should apply to all taxable transactions with an option for Member States to
apply a reduced rate only to goods and services listed in Annex H (list of goods and services which may be
subject to reduced rates of VAT) to the Sixth VAT Directive 77/388/EEC (2). Audio books are not, as such,
included in Annex H so they are submitted to the standard rate.

C 88 E/542

Official Journal of the European Union

EN

8.4.2004

The merits of extending the scope of reduced rates to new areas have been carefully examined. For
historical reasons, the reduced rate applies to books in 12 Member States and the zero rate in two Member
States (Denmark applies a unique rate of 25 % to all goods and services). On the other hand, all 15 Member
States apply, at the current time, the standard rate of VAT to audio supports.

The proposal for a Directive concerning reduced rates of VAT (3) of 23 July 2003 aims essentially at
improving the functioning of the Internal Market by rationalising the use of reduced rates by Member
States to avoid potential distortions and by allowing Member States equal possibilities to apply reduced
rates.

In terms of rationalising the present situation, category 6 of Annex H has not been modified by the
Commission proposal and reduced rates applied to books can be maintained. Moreover, the Commission
proposes including in category 4 the following goods:

The supply of medical equipment, aids and other appliances normally intended to alleviate or treat
disability, for the exclusive personal use of the disabled, and apparatus and electrical, electronic or
other equipment and means of transport, designed or specially adapted for the disabled. Repair of
such goods.

Should this proposal be adopted, audio, video or other supports specially designed or specially adapted for
the disabled could be subject to a reduced VAT rate. As there is no other definition at Community level,
Member States will have to determine if audio books should be considered as part of this category even if
the mainstream population can also buy and use them.

The Commission is aware of the problem the Honourable Member referred to and it will keep this
question in mind during the negotiation of the Commission proposal of 23 July 2003, currently examined
by the Council.

It is now up to the Council to decide, by unanimity, and in the light of the opinion of the Parliament, on
the future scope of the reduced rates of VAT. However, a more targeted solution to this particular problem
could perhaps be found outside the VAT system, by a national system of grants or refunds to compensate
for the VAT paid. This matter falls within the competence of the United Kingdom authorities.

(1) Council Directive 92/77/EEC of 19 October 1992 supplementing the common system of value added tax and

amending Directive 77/388/EEC (approximation of VAT rates) (cid:1) OJ L 316, 31.10.1992.

(2) Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonization of the laws of the Member States
relating to turnover taxes (cid:1) Common system of value added tax: uniform basis of assessment, OJ L 145,
13.6.1977.

(3) COM(2003) 397 final.

(2004/C 88 E/0554)

WRITTEN QUESTION E-0852/04

by Michl Ebner (PPE-DE) to the Commission

(19 March 2004)

Subject: Building projects in East Africa

East Africa covers the area east of the Central African Rift Valley between Ethiopia and the Ruvuma River
and includes the countries of Uganda, Kenya, Rwanda, Burundi and Tanzania. Typical of these countries
are weak and underfunded State institutions, often unable to fulfil important government responsibilities.
They can therefore cope with only very few of the challenges posed by sustainable development. The result
is poverty and social underdevelopment. Moreover, running water, electricity and smoothly operating
infrastructure are still rarities, with a lack of educational
institutions and poor health also impeding
progress.