Category Archives: News & alerts

France: Proposed increase of the reduced VAT rate to 7%

The French Prime Minister announced recently that from 1 January 2012 the reduced VAT rate for “standard reduced articles” is expected to be increased from 5.5% to 7% (subject to Parliamentary approval). This change will affect among others also the sales of all e-books in France; as we have reported previously France intends to sell the e-books at reduce rate as of 1 January 2012.
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EU: ECJ hears phone cards case Lebara (C-520/10)

In its submission to the hearing, the European Commission adopted the approach favored by Lebara Ltd, suggesting that in such circumstances the supply by the TelCo (i.e. the card issuer) is liable to reverse charge VAT in the distributor’s country, and that the onward supply by the distributor to the end user is subject to local VAT in the Member State where the distributor is established. Find out more

France: VAT reduced on e-books as of 1 January 2012

As of 1 January 2012 e-books sold in France will be cheaper due to a lower VAT rate. They will be taxed with 5.5% instead of 19.6%. This will make the France the cheapest country to sell e-books in the whole EU. It might be interesting for e-publishing companies to consider to relocate their e-book stores to France to benefit from the low VAT rate for their EU wide e-book sales.

According to new article 278 bis 6° of the French Tax Code (implementation of article 98.2 of the VAT Directive EC/112/2006), the French VAT reduced rate at 5.5% is applicable to books, whatever their physical support and including books provided by electronic means. This new provision will be applicable in France to all transaction for which the tax point occurs as from 1 January 2012.
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