This blog was last updated on June 27, 2021

EU Court Rules E-Books Are Services, Not Goods – Update to previous post. Update 8/4/2015 Sovos Compliance has continued to monitor the repercussions of the ECJ’s decision in March and would like to report on some major developments since our last blog posting. In response to the decision of the European Court of Justice (ECJ) in European Commission v. Grand Duchy of Luxembourg (Case C -502 / 13), the Luxembourg Ministry of Culture issued a press release stating that Circular No. 756 providing for the application of the super-reduced rate of 3% will not be applied. Thus, on March 16, 2015, Circular No. 756bis repealed Circular No. 756 of 12.12.2011 which specified that the term “book” does not distinguish between physical media and digital media and that the same rate which applies to books would apply to e-books.  This repeal was effective May 1, 2015 and as such, Sovos Compliance updated all relevant digital content to reflect the standard rate of 17% in Luxembourg. Shortly after the ECJ ruled that e-books are not considered “books” under EU law, the Culture Ministers of Germany, France, Poland, and Italy released a joint statement urging the European Commission (EC) to enable Member States to charge the same VAT rate on e-books as they do on paper books. The Culture Ministers called for an end to “the unjustifiable discrimination towards e-books,” arguing that “a book is a book no matter what form it is.” It remains to be seen, however, whether the EC will actually seek to change the law by updating the EU VAT Directive. Not surprisingly, France has made no move towards a modification of French law and doctrine. Therefore, e-books remain subject to the reduced VAT rate in France.  Same goes for Italy. However, Italy still faces the risk of a referral from the European Commission to the ECJ similar to that suffered by France and Luxembourg. Please stay tuned as we will be posting any further developments as they arise.