Thursday, 5 March 2015

E-books possibly more expensive in the future for certain European consumers

Today, the ECJ decided that the rules in place in France and Luxemburg, that established a strongly reduced VAT for e-books, are in breach of EU law.

VAT rules are indeed harmonised in the EU by virtue of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax and its implementing regulation. These rules explicitly prohibit levying a reduced VAT on services provided through electronic means, and the Court has considered that e-books are indeed services and not goods. 

Member States are however not prevented from keeping lower VAT in place as far as physical books are concerned. The latter are to be considered goods, as it is impossible to imagine their transmission without a physical support (ie paper). 

Italy has also recently lowered the VAT on e-books, after pressing campaigns focussing on the need to promote readership irrespective of the "infrastructure". The Kingdom of Belgium had intervened in both proceedings to support the "non-compliant" Member State's position.

The decision might entail a price increase for e-books, unless publishers decide, at least for some time, to give in part of their share in order not to discourage e-readers.

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