Tag Archives: France

EU: What is the correct VAT rate for e-books?

The Luxembourg VAT Authorities have issued a Circular stating that no distinction should be made between books on physical and electronic means, meaning that the super-reduced 3% rate already applicable to books should also apply to e-books. The Circular is effective as of 1.1.2012 (read more). It seems to us that Luxembourg has adopted this position as a response to France’s recent decision to adopt the reduced rate of 7% for e-books published by companies based in France (read more), even though Luxembourg officials claim that it is based on the content of the “Green paper” on future of the EU VAT system, which is actually aiming to plot the  future of the EU VAT system (and not current VAT legislation).
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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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