When is a book not a book? When it comes to European tax law. Continental lawmakers may punish France and Luxembourg for reducing VAT on e-books to match their physical equivalents.In many countries, printed books and other content artefacts enjoy reduced VAT rate exemptions for cultural reasons. But digital equivalents are mostly not exempted.
This year, France moved e-books outside the country’s standard 19.6 percent VAT bracket, putting them on a footing with physical books’ seven percent rate. Luxembourg also reduced e-book tax from its 15 percent countrywide rate to just three percent.
But the European Commission has now begun investigating the countries for potentially breaching “infringing EU law”, saying:
“This situation is creating serious distortions of competition that are damaging to economic operators in the other 25 Member States since digital books can easily be purchased in a State other than the one where the consumer resides…Full report
“Local actors in the electronic book market have complained that some of the dominant players in this market have reorganised their distribution channels to benefit from these reduced rates, which has apparently had a serious effect on the sale of books (both digital and traditional) in the other Member States in the first quarter of 2012.”
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