Luxembourg: 3% VAT rate on e-books effective 1 January 2012

The Luxembourg VAT Authorities have issued a circular (Circular 756 of 12 December 2011) stating that for books, no distinction between physical and electronic support should be made, therefore the super-reduced 3% VAT rate already applicable to books should also apply to e-books.

The Luxembourg Authorities based their decision on the ‘White Paper’ Communication from the EU Commission stating as one of the guiding principles for a review of the current VAT rate structure that “similar goods and services should be subject to the same VAT rate and progress in technology should be taken into account in this respect, so that the challenge of convergence between the on-line and the physical environment is addressed.”

The Circular will enter in force on 1 January 2012.