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A federation of publishers has enquired whether books and colouring or activity books with an ISBN are subject to the reduced VAT rate. The DGT has ruled that if they are classified as school supplies, the 4% rate does not apply; however, if they meet the definition of a book, the reduced rate is applicable.
This ruling clarifies the distinction between school supplies and books for VAT purposes, affecting how publishers of activity books must apply tax rates based on the nature of the content and its classification.
The tax team reviews your specific situation.
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