Until now, wedding photobooks such as these have been treated and subject to a reduced VAT rate of seven instead of 19 percent. From 2017, however, the wedding photobooks are to be subject to the full VAT rate as a result of an EU regulation and thus become more expensive.
Wedding photobooks are gaining increasing interest among end users. However, providers of photo books such as the CEWE Group feared a significant slump in demand for photo books until one month ago.
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The reason: Until now, photobooks were regarded as books, which meant that only the reduced value-added / sales tax rate of seven percent was due. But because photo books primarily contain photos and the text content is rather small, they are not primarily for reading, but are the current variant of the photo album. And for this, the full tax rate of 19 percent has always been due. Luckily for photobuch providers the increase of the tax burden by twelve percentage points now only until the end of the year 2016. Then it is to be feared that the manufacturers pass the tax adjustment to their customers. Thus a price increase would be unavoidable.
Why is the VAT reduction reduced?
With the title Fotobuch, the printed wedding photo albums have in recent years benefited from the sales tax reduction on books. For books in Germany traditionally only a reduced sales tax rate of seven percent is due, because “read forms”. The fact that the reduced rate of VAT charged for books is no longer applicable to photobooks is the result of an EU regulation of the end of 2015.
The photobooks were classified under CN code 4911 91 00 with Commission Implementing Regulation (EU) 2015/2254 on the classification of certain goods in the Combined Nomenclature (CN). Since a photo book is not intended for reading, the EU Commission considers that it can not be classified under tax-privileged position 4901 as a book. As a consequence of this regulation, which is directly applicable in all countries of the EU, the full turnover tax rate of 19 percent will be due for photobooks in Germany as of January 1.
VAT consequences of the EU Implementing Regulation
As a result of the EU regulation, wedding photobooks are subject to the general rate of sales tax (§12 para. 1 UStG). The tax reduction for books is thus no longer applicable. This also applies if the object to be assessed has different dimensions than those specified in the implementing ordinance as typical of photobooks or not in full-color printing. In the same letter it is mentioned that photobooks are also characterized by the fact that they do not have an international standard book number (ISBN).