light trails


CJEU ends reduced VAT rate on e-books

CJEU Case C-502/13

March 2015

On 5 March 2015, the CJEU published its decision in the Case C-502/13, Commission vs. Luxembourg. The dispute concerned the VAT rate to be applied to e-books in Luxembourg.

Since the 1st of January 2012, Luxembourg had applied its super-reduced VAT rate of 3% to the sale of e-books, mainly based on the argument that a broad interpretation should be given to the notion of books, so that no distinction between a physical and an e-book should be made.

On its turn, the Commission argued that applying a 3% VAT rate was against to the obligations lying under Council Directive 2006/112/EC, which clearly prevents Member-States to apply reduced rates to electronically supplied services.

On its decision, the CJEU has agreed with the arguments of the Commission, declaring that the application of a 3% VAT rate is against the said Council Directive and also disregarding other arguments supported by Luxembourg to apply a 3% VAT rate, such as the qualification of such supply as a supply of goods or that such distinction would breach the principle of fiscal neutrality.

In the same coherent way, France, as well, cannot longer apply its reduced VAT rate on e-Books.

E-books are therefore subject to the standard VAT rate.

We note that the place of taxation to define the appropriate standard VAT rate to apply in a “B2C” transaction must be determined according to the new VAT e-Commerce rules that are in force since the 1st of January 2015.   

This article was featured in Input, Deloitte Luxembourg's VAT Newsletter.

Click here to read previous editions.

Did you find this useful?