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Originally Posted by murraypaul
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Taxation: VAT on electronic books in France and LUXEMBOURG
The European Commission is asking France and Luxembourg to amend their VAT rates on electronic books (e-books).
Since 1 January 2012, France and Luxembourg have applied a reduced rate of VAT to e-books, which is incompatible with the current rules under the VAT Directive. Under the Directive, e-books constitute electronically supplied services, and application of a reduced rate to this type of services is excluded.
This situation is creating a serious distortion of competition to the disadvantage of operators in the 25 other Member States of the Union, as e-books can be easily purchased in a Member State other than that in which the consumer is resident, and current rules provide for application of the VAT rate in the Member State of the provider rather than that of the customer. The Commission has received complaints from a number of Ministers of Finance highlighting the negative effect on book sales in their domestic markets.
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As an almost unconnected aside, does this mean that France and Luxembourg no longer consider e-books being services, but want to treat them like *gasp* books? And would that revert the point of sale for e-books to the location of the seller instead of the location of the buyer, just like for paper books?