The BMF has issued guidance on the VAT rate applicable to supplies and intra-Community acquisitions of photo books (BMF, circular dated 20 April 2016 – III C 2 – S 7225/12/10001).
Background: Photo books are typically characterised by the following features: The content of the book is individually designed by the customer / recipient with the assistance of the supplier using a computer program made available or a corresponding internet application. What matters to the customer are the photos (possibly supplemented by short texts) depicting specific people, occasions or similar. The content of the photo book is intended to capture personal experiences or events. Furthermore, the product is not intended for general distribution or publication by a publishing house. Nor is an ISBN assigned.
Photo books generally exhibit the following characteristics: The content of the product is individually designed by the recipient with the help of a computer program provided by the supplying business, or via an internet browser using a corresponding web application. It consists of photos, possibly supplemented by short text on the activities, events, persons, etc. depicted in the photos. The content serves to document private events or to present companies (e.g. on the occasion of company anniversaries or to depict reference projects). The product is not intended for general distribution, for example through publishing houses or the book trade. No International Standard Book Number (ISBN) has been assigned.
The BMF goes on to state, among other things: • Supplies and intra-Community acquisitions of photo books are subject to the standard VAT rate (§ 12 Abs. 1 UStG).
• The reduced rate under § 12 Abs. 2 Nr. 1 in conjunction with No. 49 letter a of Annex 2 to the UStG is not applicable.
• This also applies where the item in question has dimensions other than those specified in the implementing regulation or has not been produced in full colour print, or not entirely so.
Note: The circular applies to all open cases. Subject to the restrictions in No. 49 of Annex 2 to the UStG, it will not be objected to – for supplies and intra-Community acquisitions of photo books carried out before 1 January 2017, and also for purposes of input VAT deduction by the recipient – if these transactions are subjected to the reduced VAT rate. The circular is published on the BMF website.
Source: BMF online
Frequently asked questions
Frequently asked questions
Which VAT rate applies to photo books?
Supplies and intra-Community acquisitions of photo books are subject to the standard VAT rate of 19% pursuant to § 12 Abs. 1 UStG. The reduced rate under § 12 Abs. 2 Nr. 1 in conjunction with Nr. 49 Buchst. a of Annex 2 to the UStG does not apply, as photo books do not qualify as preferentially treated books for VAT purposes.
What features characterize a photo book for VAT purposes?
A photo book is individually designed by the customer using software or a web application provided by the supplier and consists predominantly of photos, possibly supplemented by short texts. It serves to document private events or to present companies, is not intended for general distribution through publishers or bookshops, and has no ISBN.
Does the format or printing method of the photo book affect the tax rate?
No. The standard tax rate applies even if the photo book has dimensions other than those specified in the implementing regulation or was not (or not entirely) produced in full-color printing. The decisive factor is the typical function and design as an individualized photo book.
Is there a transitional rule for photo books supplied before 1 January 2017?
Yes. For supplies and intra-Community acquisitions of photo books carried out before 1 January 2017, it will not be challenged if these transactions are subject to the reduced VAT rate – subject to the restrictions in No. 49 of Annex 2 to the UStG. This non-objection also applies for purposes of the input VAT deduction by the recipient.
Why doesn't the reduced VAT rate that applies to traditional books also apply to photo books?
Traditional books are intended for general distribution through publishers or bookshops and typically carry an ISBN. Photo books, by contrast, are individually designed by the customer, serve to document personal or business events, and are not intended for general distribution. They therefore fall outside the scope of the reduced VAT rate under No. 49 lit. a of Annex 2 to the UStG (German VAT Act).