Court rules in favour of higher VAT rate on e-books

Court rules in favour of higher VAT rates on e-books

The UK and Germany pressured the European commissions (EC) to challenge the reduced VAT rates currently charged by Luxembourg and France on e-books, matching what they charge in printed copies, whereas the UK and Germany charge 0% and 7% respectively on printed books but charge their standard rates of 20% and 19% on e-books.

Under the EU VAT directive countries are allowed to levy a reduced or 0% rate on printed books. However it didn’t have an official on ruling e-books, which implies that the countries standard rates should be applied. However France and Luxembourg decided to go against this and treat e-books the same as printed copies, with Italy and Malta also joining them later on.

However after being pushed by the UK and Germany for a decision the European court of justice has ruled that e-books do not have the same characteristics of printed books and therefore cannot be subject to the same reduced rate. Meaning e-books are liable to the standard VAT rate in EU states, this is on the basis that it is a service and hence not listed in the EU directive as being subject to reduced rates.

This ruling means that France and Luxembourg now have to increase the VAT charged on e-books, with France making the change affective from 1 Jan 2016, and Luxembourg making the change from 1 May 2015.

Laura Stockley
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Laura Stockley

Consultant at eBiz Answers Ltd
Laura graduated from University with a degree in Business Studies, and has been working as an Oracle eBTax consultant for several years now, with both R12 eBTax and Fusion (Oracle Cloud) Tax. Focussing primarily on the tax module and its components, Laura also works on the other financial modules and understands how they integrate with the tax engine. Laura has worked on projects with multiple clients covering all aspects of the tax module including AP, AR and GL, working on everything from design, configuration, testing to support. An excellent communicator, Laura enjoys interacting with end users and relishes the challenge of resolving their issues; making tax an enjoyable experience, always.
Laura Stockley
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