New study: Will new magazine VAT lead to profit and jobs?

New study: Will new magazine VAT lead to profit and jobs?

April 13, 2015

Copenhagen Economics has conducted a study on import VAT on printed magazines in Danish for four Danish publishing houses represented by MAQS Law Firm.

Today, magazines printed outside the EU and sent to Danish readers are exempt of VAT. A new bill aims at changing this, imposing VAT only on magazines written in the Danish language. Magazines in languages other than Danish sent from outside the EU and supplementary magazines in Danish newspapers will still be exempt from VAT.

Based on data for 29 Danish-magazines from the four publishing houses, the main conclusions are 

  • There are very close substitution possibilities for the Danish-language maga-zines, either in the form of a similar or identical magazine in another lan-guage, or supplementary magazines distributed with the Danish newspapers
  • The introduction of VAT is likely to result in a high price increase on Danish-magazines, as the business is under pressure with falling circulation and turnover
  • VAT will likely reduce circulation with 43-64 percent for the 29 Danish-magazines in our sample due to a high increase in prices and the close substi-tution possibilities
  • Government’s projected tax revenue from the bill is likely to be too high due to the close substitution possibilities, and the fact that these possibilities are exempt from VAT
  • The bill is not likely to create any printing jobs in Denmark, as Denmark is not the cheapest alternative to the current non-EU countries. With a falling circu-lation the employment effects are likely negative for the Danish-magazines.

Download the study

For further information, please contact Partner Sigurd Næss-Schmidt