EC to challenge 'cut-price' VAT on e-books

The EC will refer both France and Luxembourg to EU Court of Justice.

In 2012 both France and Luxembourg set a 3% VAT rate on e-books to match the VAT charged on printed books.  However this unilateral decision meant that e-booksellers in those countries would enjoy a tax advantage over those located in other countries where the rate on e-books is 20%.  In a statement the EC said that this led to 'serious distortions' in the EU marketplace.

Both France and Luxembourg will now be referred to the European Court of Justice for failing to comply with EU law on VAT. 

More on this story from The Bookseller.