France ordered to raise VAT on e-books
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France has been ordered to raise sales tax on e-books from 5.5 per cent to 20 per cent. The European Union’s top court also ordered Luxembourg to raise its VAT, arguing that the lower rate on e-books was unfair competition with other member states.
"The [EU's] VAT Directive excludes any possibility of a reduced VAT rate being applied to 'electronically supplied services'," the Luxembourg-based European Court of Justice said in a ruling that ordered the countries to drop the preferential rate for downloadable books.
It was responding to a legal action by the European Commission against France and Luxembourg, which applied the same rate of VAT to e-books – 5.5 per cent in France’s case, 3.0 per cent in Luxembourg’s – as to printed books.
The ruling does not apply to print publications.
France’s publishers’ and booksellers’ organisations appealed to the European Commission to change the law “to reflect technological progress and remove a serious obstacle to the development of digital books”.
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