Magazine article Information Today

Copyright Proposals and Changes

Magazine article Information Today

Copyright Proposals and Changes

Article excerpt

What would a year be like without the European Union (EU) plotting to bring harmony to the region's diverse copyright laws? Well, 2016 is shaping up to be no exception.

At the time of this writing, the European Commission (EC) was due to unveil its proposals for a European copyright framework, while also setting out plans for further action this year. According to EC digital single market spokeswoman Marie Frenay, the first step to modernize EU copyright rules is to propose legislation for "cross-border portability of online content services." Basically, this means that users who have paid for online content in one EU member state will not have to pay for access from another.

By now, the EC should also have set out other proposals that will be--well, may be, given that it's the EU--taken forward in 2016. These include suggesting that the EU implement the Marrakesh Treaty, which commits signatory states to grant copyright exceptions to printed material adapted for use by blind or partially sighted people. This may finally prompt the EU countries that have signed the treaty to ratify it. Other proposals should feature measures to harmonize exceptions to copyrighted materials, including their use in text and data mining and the clarification of the use of such works in teaching.

Another area crying out for harmonization is the value-added tax (VAT) rate that's levied on ebooks across the EU. Member states are supposed to apply their standard VAT rate with the duty set in the country in which an ebook buyer lives. For example, this means that U.K. residents pay no VAT on hard-copy books, but pay 20% on ebooks, which are classified by the tax authorities as digital services. In Italy, the standard levy of 22% applies, although the Italian government wants to lower it to 4%. Malta gets away with a rate of 5%. In March 2015, the European Court of Justice (ECJ) ordered France and Luxembourg to raise their respective rates of 5.5% and 3% on ebooks to their standard rates of 19% and 17% respectively.

Recently, Poland's constitutional court challenged that ruling on the grounds that the European Parliament was not consulted on the legal niceties and that it breached fiscal neutrality rules inasmuch as charging separate rates for print books and ebooks distorts the market. Given that the EC wants to encourage digital market harmony and growth in the sector, the odds are that it will favor a lowering of rates on ebooks.

Richard Asquith, global tax VP at tax automation specialist Avalara, says the EC will review the rates in 2016, "giving more powers to member states to alter their reduced rates on e-books.... Italy has already indicated that it will drop its VAT rate on e-books from 22% to 4% in 2016." He expects the rates charged across EU member states to be eventually set at print book rates in 2017, "which are between 0% and 10%."

The EC J's ruling "left most countries unhappy about the differentiation between e-books and printed books. The European Commission is [now] working to find a solution to deal with the antiquated VAT Directive, and I would expect a resolution to be in place by the start of 2017," says Asquith.

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