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V3388-20 19 November 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · servicios prestados por vía electrónica

Subscription to a virtual e-book library is subject to the reduced VAT rate of 4%

A distance learning company has requested clarification on the VAT treatment for subscriptions to a digital library based in Panama. The Directorate General of Taxes (DGT) has ruled that this service constitutes an electronically supplied service providing access to e-books and must therefore be taxed at the reduced rate.

The question raised

VAT treatment of the operation of acquiring e-books by the applicant.

The DGT's ruling

Subscription to a virtual library that allows access to e-books is taxed at the reduced rate of 4%. This service is considered a service provided by electronic means whose purpose is to facilitate the reading of the work. The criterion applies whether the content is downloaded or viewed via streaming, ensuring equal treatment. The assignment of an ISBN is considered an indication to regard a publication as a book for the purposes of this tax rate.

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