The EU Court of Justice has ruled. France can not continue to apply a reduced VAT rate on digital books and will therefore apply the standard VAT rate of 20%.
The Court agreed with the European Commission, which had brought actions against France and Luxembourg, which apply from 1 January 2012 VAT rate respectively 5.5% and 3% providing electronic books. The European Commission had asked the Court to declare that the application of a reduced VAT rate in these two countries on digital books went against the VAT Directive.
France in breach
France had deliberately taken the risk to get in breach of EU VAT legislation in order to ensure equal treatment access to culture regardless of the medium.
The Court ruled Thursday in favor of the Commission, in concluding that the reduced rate applies only to the supply of books “on any physical medium.” If the e-book needs to be read in a physical medium, such as a computer, “such support is, however, not included with the e-book,” notes the Court. It also points out that “the VAT Directive precludes any possibility of applying a reduced VAT rate to electronically supplied services” and believes that “the provision of electronic books is such a service,” not a supply of goods.
The press line in sight
France is liable to a similar decision concerning reduced VAT that applies to the press line. European law forbids explicitly grant a reduced VAT rate to online media and electronic publications.
But France, pressed by online news sites like Mediapart applies since last year in the electronic press a reduced VAT rate of 2.1%, as for the clipboard, to support a fragile economic model. The European Commission believes that such a policy creates distortions of competition between Member States.
No comments:
Post a Comment