Foreign magazines face colossal levy

Tax ministry’s unpopular proposal would force Post Danmark to place 160 kroner import levy on magazines printed outside the EU

Whether it’s the classic brown envelope of National Geographic, or the bold illustrations gracing the cover of the New Yorker, the arrival of one’s favourite magazine is a monthly highlight in many people’s lives – an event calling for long sessions on the sofa while every word is pored over and slowly absorbed.

But you soon might have to pay through the nose for the pleasure if your favourite magazine happens to be printed outside of the EU. A proposal due to come into force on April 1 will abolish the VAT exemption on magazines printed outside the EU to encourage Danish publishers to print their publications closer to home. In the future, consumers subscribing to publications printed outside the EU will have to go to the post office and pay Post Danmark the VAT and a 160 kroner processing fee before you can take it home.

National Geographic will go from a 27 kroner a month habit to 194 kroner – an increase of over 600 percent.

The law change is designed to bring printing jobs back to the EU, and it may just have an effect. Danish publisher Aller admitted to newspaper Politiken on Sunday that it would move printing operations from Norway to Denmark if they lose the VAT exemption. But many are worried that Danish publishers have too little time to adapt to the changes by either moving printing operations  to Denmark or cutting costs enough to cover a VAT bill which may run into the tens of millions of kroner for some medium-sized publishers.

Most criticism of the legislation, however, has been directed at the effect it will have on the price and availability of foreign publications. Lauge Dehn runs Nordic Subsription Service, a company that has sold subscriptions to a wide variety of international magazines to Danes since 1969. Some of the magazines they sell – such as National Geographic, Scientific American and Harvard Business Review – will unlikely ever be printed in Europe and will consequently become inordinately expensive.

“I honestly do not understand the purpose of this proposal,” Dehn told The Copenhagen Post. “It will just prevent Danes from getting internationally-renowned magazines. Harvard Business Review is printed in English in the USA, and it will never be printed in Denmark.”

According to Dehn, the legislation is a strong move that will probably only reap a modest reward for the government in the form of increased tax revenue – about seven kroner from the sale of a 27 kroner magazine which will cost consumers 194 kroner.

“Does that make sense? Not to me certainly, and most likely not to any other Danes,“ Dehn added. “I really do not think that the legislators in the rest of Europe could propose something as stupid.”

Isabella Smith, owner of English bookshop Books & Company, is similarly critical of the legislation. Smith sells a range of magazines in her shop, and while most are published within the EU and will not face price increases, some specialty magazines such as the New Yorker will face the 160 kroner a copy import fee.

“It seems shortsighted and out of proportion to punish magazines originating from outside the EU which cannot be printed here in order to punish publishers residing within the EU who could print here but choose not to in order to get around the VAT,” Smith told The Copenhagen Post. “The main negative consequence will be a loss of cultural diversity brought about by the increasingly difficult access to magazines from outside the EU, whether it be a non-mainstream magazine from the US or a popular one from Asia and the Middle East.”

The law is in the final stages of consultation, but the recent media debate about the issue was only raised after the tax minister, Thor Möger Pedersen, seemingly played down the logistical difficulties of implementing the law to the tax committee overseeing the changes.

According to Politiken , the Tax Ministry omitted concerns raised by Post Danmark in a document sent by the Transport Ministry on the issue. The redacted document, which the tax committee is using to base its judgement, seems to imply that as long as magazines are clearly labeled with customs slips, there should be no problem.

Post Danmark is concerned, however, that magazines will not be clearly labelled. And as they process over nine million foreign magazines a year, they may face an enormous additional workload.

“Post Danmark will in principle be expected to check every shipment that appears to be a magazine and determine whether the recipient is an individual or a business and then estimate the value of the shipment,” Post Danmark wrote in the document sent to the Tax Ministry. “It is a tremendously large task, as Post Denmark will have to check all shipments that are sent from non-EU countries.”

Post Danmark added that they expected the proposal to lead to significantly higher costs related to custom charges and staffing as well as an increase in the number of complaints they have to handle.

So far the government has made no comment justifying the effect of the law on foreign media, though Nadeem Farooq (Radikale) did tell Politiken that, “if there are aspects of the proposal that have unforeseen consequences, we need to take a look at them”.

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