Electronic idiocy: VAT and ebooks (and art and libraries)

January 4, 2011

You can tell from the title this is going to be a fun post. Hello 2011! Let’s talk about tax!

So, today, value added tax (VAT) in the UK goes from 17.5% to 20% in an ’emergency’ raise that’s unlikely to ever come down (the last ‘temporary’ raise was from 15% to 17.5% was under John Major to fund introduction of the council tax—twenty years ago).

Many people don’t know this, but in the UK, paper books are exempt from VAT, along with quite a few other things, including ‘essentials’ like childrens’ clothes and medicines, but also the sale and charter of helicopters and airships. Obviously.

The current UK government has promised to uphold the exemption throughout its current term, which is nice. But they also promised to look at something else: VAT on ebooks.

Ebooks are not exempt from VAT, being classed as, I believe, ‘electronic guides’ rather than ‘books’. So you will either be paying more for your ebooks, or publishers, who we do retain some sympathy for, honest, will be earning less.

Can we all agree that this is idiocy?

We’ve been at this a while now, but it apparently needs restating: (text-only) ebooks are books. And in fact, the extraordinary has happened: the EU has agreed, and last year passed a special measure—a rare thing—stating that member countries will be allowed to charge a reduced VAT rate on “any similar physical medium that predominantly reproduce the same textual information content as printed books”, come January 2011 [The Register] (Across the EU in general, paper books are charged at a reduced rate, although not zero as in the UK). The French said they were going to implement it in advance before delaying until 2012. Not a peep from the UK treasury, who are currently doing their best to keep books away from poor kids.

Let’s compare this to another piece of idiocy: Flavin and Viola light works ruled “not art”, wherein two of my favourite artists, Dan Flavin and Bill Viola, are violated by the tax authorities:

In its ruling a Flavin work is described as having “the characteristics of lighting fittings… and is therefore to be classified… as wall lighting fittings”. As for Viola, the video-sound installation, says the document, cannot be classified as a sculpture “as it is not the installation that constitutes a ‘work of art’ but the result of the operations (the light effect) carried out by it”.

There’s actually something quite good about that: art is not the object itself, but its effect on the viewer. Duchamp would be proud. It is, however, a terrible contradiction in this case: if it is not the installation (the delivery mechanism, say) that constitutes the work, but its operations (effect), then the ebook is indubitably equivalent to the book.

And then let’s flip it the other way: if books are essentials, why are we shutting all the libraries? (More cheery news!)

In the UK, local libraries are seriously under threat. Councils are threatening to close them down all over the place if they can’t persuade local community groups to take them over, with minimal council support. The very Big, very cold, Society in action.

But wait, we’ll replace them with ebook lending libraries! Did you know you can borrow ebooks from your local library? Well, in many cases you can, thanks to restrictive DRM which ‘expires’ the books after a certain term.

I don’t really need to underline what an awful idea this is, as libraries primarily benefit the poorer members of society, who aren’t big on buying ereaders. Or that it means ever more Catherine Cookson and ever fewer educational texts on offer. The whole issue of lending ebooks, highlighted by Amazon’s recent announcement for Kindle, I want to write about another time.

But let’s consider the final piece of idiocy on offer. In order to borrow ebooks from your local library, you will have to go into the actual building in case you’re a chinese pirate.


Updated EU Tax info 4/1/10 10am, thanks to Jorge Portland

Photo Dan Flavin – Retrospektive CC Victor Bergmann

Comments are closed. Feel free to email if you have something to say, or leave a trackback from your own site.