For a long time, most EU countries have been changing higher VAT rates for ebooks than for print books. Quite often, the print book rate is under 10%, and the ebook rate has been 20% or higher.

Now, recently this is changing for the better in many EU countries, and the ebook rates are coming down. There are some complications, however: some countries require an ISBN on ebooks, other countries exclude specific types of books, etc.

Furthermore, we are based in Canada, and we file our VAT returns with one EU country using the VAT MOSS system. We cannot just change a rate because we see it reported somewhere; we need confirmation that the lower ebook rate will be actually available to us to use when we file our quarterly VAT return.

The only time that we can confirm what VAT rates will be available for us to use is when we file our quarterly VAT returns. We cannot file a VAT return until the quarter has ended, and quarters end on March 31, June 30, September 30 and December 31. So, the very next day after a quarter ends is the earliest that we can check the officially-available VAT rates with the EU country that we file our VAT MOSS returns with.

Specifically, this means that we can only confirm the available VAT rates on January 1, April 1, July 1 and October 1, and we update the VAT rates that we are charging shortly afterward.

So, if there is a lower rate available for a given country, and there are no unfortunate exclusions (like requiring ISBNs), then we update our VAT rate going forward at that time.

To take a very specific example, if you live in Germany, we hope very much that we will be able to charge you 7% VAT starting on April 1, 2020.

Until then, we do not know whether we will be able to file a VAT MOSS return using that rate, so we are still stuck charging the 19% ebook VAT rate which we have used to date. (Historically, Germany has taxed paper books and ebooks at a different VAT rate: while there is a 7% VAT rate on physical books in Germany, there has been a 19% VAT rate on ebooks.)

Finally, we are a Canadian startup, and we have no input into the VAT rates charged by various EU countries -- we just comply with them!

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