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V1827-17 10 July 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo impositivo reducido

4% VAT rate applies to physical books (paper, USB or DVD) while 21% applies to electronic download services

The taxpayer inquired about the VAT rate applicable to the supply of books, magazines, and fascicles in paper format or on digital media such as USB or DVD. The DGT ruled that the physical medium is irrelevant for applying the reduced rate of 4%, whereas direct downloads via the internet are taxed at 21% as they constitute an electronic service.

The question raised

Tax rate for Value Added Tax purposes applicable to deliveries to customers of books, magazines, or fascicles in paper format, or to the same deliveries in a digital file (USB or DVD).

The DGT's ruling

Books, newspapers, and magazines that do not have a predominantly advertising purpose are taxed at 4% if delivered on any physical medium, including USB or DVD. Conversely, the download of electronic files or direct viewing on a website are considered services provided by electronic means and are taxed at the general rate of 21%. A physical medium is required for the supply of e-books to qualify for the reduced rate.

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