Commission warns France and Luxembourg over VAT on eBooks
06 July 2012
The European Commission has launched infringement procedures against France and Luxembourg for reducing their VAT rates on eBooks, which it argues is distorting competition for other member states.
From January 1 2012, France reduced its VAT rate on eBooks to 7%, while Luxembourg cut its rate to 3%.
Under the VAT Directive, member states are allowed to set VAT on paper books to reduced rates, however digital books fall under the category of electronic services, which cannot be taxed at reduced rates.
A Commission spokesperson said the reduced rates imposed by France and Luxembourg is creating serious distortions of competition which is damaging to the other 25 member...
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