Right now in the UK, VAT is at 20% on ebooks as it is for any other standard rate item. Physical books and magazines are at 0%. Most people won't be paying this though, as sites like Amazon sell from Luxembourg where VAT on eBooks is 3% (http://www.amazon.co.uk/gp/help/customer/display.html?nodeId...). This can mean that providing a digital product (this recently came up with the Linux Voice IndieGoGo http://www.indiegogo.com/projects/linux-voice/) doesn't knock off as much of the cost as you might expect.
The Luxembourg loophole is expected to be closed by 2015, at which point Luxembourg must increase its VAT in line with those of other EU nations (or alternatively, must alter its VAT system so that the 3% rate is only available for sales to Luxembourg customers). If Luxembourg doesn't change its VAT system, the European Commission will likely carry through on last year's threat to impose fines which would wipe out the tax income Luxembourg currently generates from offering the loophole to companies like Amazon.
http://www.the-digital-reader.com/2013/09/18/new-tax-rules-e...