ECJ Rejects Tax Breaks on E-Books

March 8, 2017 Taxation in EU

E-book taxLUXEMBOURG – E-books cannot be sold with a discounted rate of VAT, according to the top court in Europe.

On March 7th, the European Court of Justice ruled that no member-states of the EU may apply a reduced rate of VAT on the sale of digital books, newspapers, or other publications.

According to current EU regulations, EU-member countries are allowed to apply a reduced rate of VAT on the sale of books, a tax measure which is aimed at increasing the instances of reading throughout member countries.

The reduced rates would also apply to newspapers, and other printed materials.

The Court was brought forward to interpret the rules regarding the application of VAT on books and newspapers, following a legal challenge where some EU-member states claimed that the reduction of VAT on e-books and similar digital publication falls within the aims of the EU.

The Court was asked to determine whether the Eurpean Parliament should be consulted on the exact legislation regarding discounting VAT rates for digital publications, but it was ruled that the current application of the rules falls in line with the legislation.

The ruling means that until the current regulations are changed, e-books and other digital publications must be levied the full rate of VAT applicable in the country of sale.