Association Seeks Clarity On VAT For Newspapers And Magazines

Q.  What do the Irish Farmers Journal, the Irish Field, the Irish Racing Post and the Sporting Press have in common?

A.   According to Newspread, the distributor lists them as magazines in both their delivery and recall documentation. They also list ALL the 53 local and provincial titles they distribute (with the exception of the Donegal Democrat) as magazines!

Can the Irish tax authorities be expected to make a simple distinction between the outpourings of a journalist working for an Irish-published and printed Current Affairs publication and those of an English-based hack?

If an article written by a sporting/political/ commentator is published in a daily, local or Sunday newspaper it will not have VAT to act as a barrier to access, but if the exact same article is printed in an Irish published magazine, are we to believe that the VAT status will continue to be oppressive?

When the body associated with every aspect of the wholesale distribution of a title makes a determination that a newspaper is a magazine, how difficult will it be for the Department of Finance and the Revenue Commissioners to identify the printed publications that are to be freed from the obligation to have that levied upon them? VAT has been levied on newspapers and magazines at the same Tax rate ever since the code was introduced in 1972. The vast majority of our POS and back-office reporting systems have treated the two sub-sectors of “News and Mags” as being the same for sales reporting and for the purpose of VAT recording.

We have engaged with individual publishers, and with the body that represents them and who were responsible for the successful campaign to persuade the government to treat newspapers favorably, given the importance of journalism in a democratic world. We would of course wish our part in the spread of democratic ideals to be duly noted.

When the Finance Bill is drafted, it will need to be very clear which ( if any) publication will continue to have VAT levied upon them, and which will not- as retailers we have considerable interest in this-we are the ones that will have obligations to return VAT on sales of these publications, an obligation that could prove hugely expensive if we do not properly identify each of these titles’ VAT rate correctly.

Many retailers will recall the very significant (and costly ) errors that have been made over the years with incorrectly applying VAT rates to certain styles of hot food, drinks, biscuits etc.

We have also been in correspondence with both the Departments of Enterprise and Finance and also with Minister Catherine Martin TD who advanced the cause of VAT- free publications to the Cabinet.

Retailers will benefit financially from this decision, assuming that the publishers will not reduce the printed cover price. During discussions between the Department of Finance and those engaged by the publishers to put the case for removal of VAT from national and local papers, a figure in excess of €25 million was suggested as the amount of VAT contributed through the Irish publisher’s publications. This would indicate that retailers would be in line for between €7 and €8 million of additional earnings. In the meantime, we will continue to make a case for all printed publications to be properly identified in advance of Finance Bill being drafted. We will obviously also be ensuring that the transition at both distributors EMN and Newspread will be error-free.