ECJ Rules that Ebooks must have standard VAT rate

pdurrant · 03-08-2015, 02:48 PM

Way back in 2012, Luxembourg and France dropped the VAT rate they charged on ebooks from the standard rate to the reduced rate (17% -> 3% in Luxembourg and 20% -> 5% in France).

The European Comission ruled against them in 2013, but they appealed to the European Court of Justice.

The European Court of Justice has now ruled that they are not allowed to charge the reduced, as ebooks must be classified as electronically supplied services, not as books, and so are ineligible for the reduced rate.

This is unfortunate, but expected - the relevant laws are pretty clear. It is to be hoped that the relevant EU laws can be changed, but even if they are, it will take some time.

Thanks to Ink, Bits & Pixels for the info that the judgement had been rendered.

eschwartz · 03-08-2015, 03:05 PM

Hopefully the insanity will be rectified in the near future.

tubemonkey · 03-08-2015, 03:07 PM

This ruling is lame. A book is a book is a book. Different rules based on format are nothing short of arbitrary. Why should it matter what form the book is produced and sold in?

pdurrant · 03-08-2015, 03:13 PM

Quote:

Originally Posted by tubemonkey

This ruling is lame. A book is a book is a book. Different rules based on format are nothing short of arbitrary. Why should it matter what form the book is produced and sold in?

It shouldn't Unfortunately, ebooks weren't really considered (weren't really around) when the relevant laws were written.

theducks · 03-08-2015, 03:29 PM

REVENUE source
Governments never want to give it up once they have their hands into it.

Just because the windfall was from unanticipated technology...

OTOH Watch them move if the thought that something SHOULD be taxed and is not

rkomar · 03-08-2015, 03:34 PM

Quote:

Originally Posted by tubemonkey

This ruling is lame. A book is a book is a book. Different rules based on format are nothing short of arbitrary. Why should it matter what form the book is produced and sold in?

The contents of the paper book and ebook may be the same, but the infrastructure around them is completely different. You don't buy an ebook, you buy a license to access the ebook. It is only for you, and can't be passed on to someone else. The license can be revoked at any time. You need to access servers to validate the license when DRM is applied to the ebook. Ebooks are treated just like software by the vendors, so it's no surprise that they get taxed the same way.

rkomar · 03-08-2015, 03:39 PM

Quote:

Originally Posted by theducks

REVENUE source
Governments never want to give it up once they have their hands into it.

Just because the windfall was from unanticipated technology...

OTOH Watch them move if the thought that something SHOULD be taxed and is not

So, how do you explain the lower taxes on paper books?

tweety · 03-08-2015, 06:00 PM

If ebooks are no different from software.

We can legally sell on our licence for Software and retailers can cell 2nd hand software licences.

thewitt · 03-08-2015, 07:51 PM

If I sell you a PDF file in the UK, the VAT tax is 20%. If I first print that same PDF file and sell it to you on paper, there is no VAT tax...

Makes perfect sense....not

Jack Torrance · 03-08-2015, 08:01 PM

[QUOTE=thewitt;3060977]If I sell you a PDF file in the UK, the VAT tax is 20%. If I first print that same PDF file and sell it to you on paper, there is no VAT tax...

Makes perfect sense....not[/QUOTE]

And I'm sure they wonder why people pirate stuff.

PeterT · 03-08-2015, 08:04 PM

Quote:

Originally Posted by thewitt

If I sell you a PDF file in the UK, the VAT tax is 20%. If I first print that same PDF file and sell it to you on paper, there is no VAT tax...

Makes perfect sense....not

I can see it now. I print out the entire source code to the ePub and sell that to you for you to type it out and recreate the eBook.

Barcey · 03-08-2015, 08:21 PM

Hmmm, I wonder if it would be cheaper to sell ebooks through card punch readers.

cfrizz · 03-08-2015, 08:56 PM

[QUOTE=Jack Torrance;3060980]

Quote:

Originally Posted by thewitt

If I sell you a PDF file in the UK, the VAT tax is 20%. If I first print that same PDF file and sell it to you on paper, there is no VAT tax...

Makes perfect sense....not[/QUOTE]

And I'm sure they wonder why people pirate stuff.

Bingo! It's crap like this that encourages pirating, and they have no one to blame but themselves.

murg · 03-08-2015, 09:06 PM

Quote:

Originally Posted by rkomar

The contents of the paper book and ebook may be the same, but the infrastructure around them is completely different.

Not really. You go to Amazon.com, select a book, pay for it, and it gets delivered to you.

Quote:

Originally Posted by rkomar

You don't buy an ebook, you buy a license to access the ebook. It is only for you, and can't be passed on to someone else. The license can be revoked at any time.

This is just the way that it is implemented. The vendor wants me to buy the book. I buy the book. Some vendors will let me share the book. Some are working on letting me sell the book.

Other than the 'first sale' doctrine, these restrictions could be placed on physical books.

Have you read the 'license' on video tapes and DVD/BluRays? They claim you can't do all kinds of things with them. Which everyone ignores.

Quote:

Originally Posted by rkomar

You need to access servers to validate the license when DRM is applied to the ebook.

This is only if the vendor imposes their DRM on the book. This is not something that is inherent with electronic books. If there is no DRM, there is no interaction with the servers once the book is delivered.

Quote:

Originally Posted by rkomar

Ebooks are treated just like software by the vendors, so it's no surprise that they get taxed the same way.

The content of many books that I buy are simply scanned versions of the physical books, right down to the printing number on the copyright page. They are exactly like the physical book, with the exception of generally being of poorer quality, with many uncorrected scan errors.

And now, that poorer quality widget costs more.

SteveEisenberg · 03-08-2015, 09:35 PM

Quote:

Originally Posted by Jack Torrance

And I'm sure they wonder why people pirate stuff.

No reason to wonder.

People pirate stuff because they can then get it for free. Other factors include how acceptable piracy is within one's peer group.

As for the justice of charging a higher tax for the eBook: I think that in the past, it was consistent with social justice because the people who could afford eReaders were more affluent than paper book purchasers. But as eReader and tablet prices come down, this won't be true any more. So what was a good policy should be reconsidered.

03-08-2015, 02:48 PM	#1
pdurrant The Grand Mouse 高貴的老鼠 Posts: 72,518 Karma: 309063598 Join Date: Jul 2007 Location: Norfolk, England Device: Kindle Voyage	ECJ Rules that Ebooks must have standard VAT rate Way back in 2012, Luxembourg and France dropped the VAT rate they charged on ebooks from the standard rate to the reduced rate (17% -> 3% in Luxembourg and 20% -> 5% in France). The European Comission ruled against them in 2013, but they appealed to the European Court of Justice. The European Court of Justice has now ruled that they are not allowed to charge the reduced, as ebooks must be classified as electronically supplied services, not as books, and so are ineligible for the reduced rate. This is unfortunate, but expected - the relevant laws are pretty clear. It is to be hoped that the relevant EU laws can be changed, but even if they are, it will take some time. Thanks to Ink, Bits & Pixels for the info that the judgement had been rendered.

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03-08-2015, 03:05 PM	#2
eschwartz Ex-Helpdesk Junkie Posts: 19,421 Karma: 85397180 Join Date: Nov 2012 Location: The Beaten Path, USA, Roundworld, This Side of Infinity Device: Kindle Touch fw5.3.7 (Wifi only)	Hopefully the insanity will be rectified in the near future.

03-08-2015, 03:07 PM	#3
tubemonkey monkey on the fringe Posts: 45,663 Karma: 158546452 Join Date: May 2010 Location: Seattle Metro Device: Moto E6, Echo Show	This ruling is lame. A book is a book is a book. Different rules based on format are nothing short of arbitrary. Why should it matter what form the book is produced and sold in?

03-08-2015, 03:29 PM	#5
theducks Well trained by Cats Posts: 30,445 Karma: 58055868 Join Date: Aug 2009 Location: The Central Coast of California Device: Kobo Libra2,Kobo Aura2v1, K4NT(Fixed: New Bat.), Galaxy Tab A	REVENUE source Governments never want to give it up once they have their hands into it. Just because the windfall was from unanticipated technology... OTOH Watch them move if the thought that something SHOULD be taxed and is not

03-08-2015, 06:00 PM	#8
tweety Enthusiast Posts: 34 Karma: 2016606 Join Date: Jun 2008 Device: Kindle Scribe	If ebooks are no different from software. We can legally sell on our licence for Software and retailers can cell 2nd hand software licences.

03-08-2015, 07:51 PM	#9
thewitt Zealot Posts: 129 Karma: 1135446 Join Date: Nov 2014 Location: Miami, Florida Device: iBooks	If I sell you a PDF file in the UK, the VAT tax is 20%. If I first print that same PDF file and sell it to you on paper, there is no VAT tax... Makes perfect sense....not

03-08-2015, 08:01 PM	#10
Jack Torrance “Here’s Johnny Posts: 185 Karma: 3863056 Join Date: Mar 2014 Location: Overlook Hotel Colorado Device: Kindle DXG - 9.7 iPad - iPhone 12PM - Macbook Pro	[QUOTE=thewitt;3060977]If I sell you a PDF file in the UK, the VAT tax is 20%. If I first print that same PDF file and sell it to you on paper, there is no VAT tax... Makes perfect sense....not[/QUOTE] And I'm sure they wonder why people pirate stuff.

03-08-2015, 08:21 PM	#12
Barcey Wizard Posts: 1,531 Karma: 8059866 Join Date: Oct 2007 Location: Canada Device: Kobo H2O / Aura HD / Glo / iPad3	Hmmm, I wonder if it would be cheaper to sell ebooks through card punch readers.

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