France hikes e-book VAT from 5.5% to 20% 2016

Thu 26th Mar 2015

France is preparing to reclassify sales of e-books from its reduced VAT rate of 5.5% to its standard rate of 20% from 1 January 2016.

The change comes following the European Court of Justice ruling on e-book VAT on 4 March 2015 which clarified that e-books were liable to the standard VAT rate in EU member states. This is on the basis that they are a service, and not listed in Appendix III of the EU VAT Directive as being entitled to enjoy the same reduced VAT rates as printed book.

The ruling applied to France and Luxembourg, which had both lowered their electronic book VAT rates in 2013. Italy and Malta had followed them at the start of 2015.

Since the ruling, Luxembourg announced it would raise e-book VAT to 17% from 1 May 2015.

Germany, France, Italy and Poland call for ebook VAT review

Following the ECJ ruling, Germany, France, Italy and Poland sent a joint statement to the European Commission requesting a review of e-book VAT. It is believed that the UK is the last major state holding out against a harmonization of e-book VAT rates.